Which of the Following Is an Inappropriate Pair When Applied $\equiv$

question 56

Multiple Choice

Which of the following is an inappropriate pair when applied to currency options?

• A) American option \( \equiv \) early exercise
• B) call option \( \equiv \) put option
• C) exercise price \( \equiv \) striking price
• D) long position \( \equiv \) short position
• E) option writer \( \equiv \) option seller

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Definitions:

Indirect Correlation

A negative correlation where the values of variables move in opposite directions.

Nondirectional Correlation

A type of correlation that measures the strength and direction of a relationship between two variables, without assuming which variable influences the other.

Unidirectional Correlation

A correlation where an increase in one variable is associated with an increase in another or a decrease in one is associated with a decrease in the other, without implying causation.

Negative Correlation

An association between two variables characterized by the increase of one and the decrease of the other.