Which of the Following Is FALSE

question 28

Multiple Choice

Which of the following is FALSE?

• A) Options are always more volatile than the assets on which they are based.
• B) Returns on options are inherently non-normal.
• C) Returns on options are asymmetric.
• D) The volatility of an option changes with changes in the value of the underlying asset.
• E) Option pricing methods discount option payoffs at a risk-adjusted discount rate.

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Definitions:

Domestically Produced

Referring to goods manufactured or services provided within a country’s borders, as opposed to imported from other countries.

Foreign Countries

are nations other than one's own, encompassing different governments, cultures, languages, and geographic locations outside of a person's native country.

Trade Restrictions

Regulations and policies that governments impose to control the free exchange or movement of goods between countries.

Embargo

Total ban on importing specific products or a total halt to trading with a particular country.