List and Explain 3 Factors That Determine the Size of a Speculative

question 51

Essay

List and explain 3 factors that determine the size of a speculative premium of a call or put option in the markets.

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Definitions:

Y Predictor

A variable used in statistical models to predict another variable, often denoted as the independent variable.

Regression Line

A straight line that best fits the data on a scatterplot, showing the average relationship between the independent and dependent variables.

Slope

The gradient or tilt of a line on a graph, indicating the relationship between two variables.

Y-Intercept

This refers to the point on a graph where the line crosses the Y-axis, typically representing the value of the dependent variable when the independent variable is zero.