If a trader buys an option at an implied volatility of 10%, and plans to delta hedge it, over the life of the option she hopes realized volatility will be:

b. lower than 10%

Explanation:

Missing word "a. higher than 10%, b. lower than 10%, c. if its three month option then she hopes its 10/3, d. irrelevant where realized will be"

If a trader buys an option at an implied volatility of 10%, and plans to delta hedge it, over the life of the option she hopes realized volatility will be lower than 10%. When hedging implied volatility through delta hedging is done, it means that the trader is expecting that volatility will decline and it has taken the position on the the downside of the implied volatility as it is reflected by the delta hedging. Delta hedging is not about betting on the upside of implied volatility.

answer/// real gdp decreases to y3 and the price level falls to p3;

answerindividual preferences are not revealed in the market for the good;