The Three Conditions Necessary for Causation Between Variables Are ________

question 34

Multiple Choice

The three conditions necessary for causation between variables are ________, ________, and ________.

• A) correlation coefficient; temporal priority; positive correlation
• B) temporal priority; negative correlation; positive correlation
• C) negative correlation; spurious correlation; correlation coefficient
• D) correlation; temporal priority; lack of spurious correlation

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Definitions:

Underlying Asset

An asset upon which a derivative's price is based, ranging from commodities and currencies to stocks and bonds.

Call Price

The price at which a callable bond can be redeemed by the issuer before its maturity date, typically higher than the face value.

Option Value

The inherent value of an option contract, determined by factors like the underlying asset's price, the strike price, and the time until expiration.

Gamma

The curvature of an option pricing function (as a function of the value of the underlying asset).