The Theta of an Option Is Defined As

question 83

Multiple Choice

The Theta of an option is defined as:

• A) expected change in the option premium for a small change in time to expiration.
• B) expected change in the option premium for a small change in volatility.
• C) expected change in the option premium for a small change in the spot rate.
• D) expected change in the option premium for a small change in the domestic interest rate.

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Definitions:

Confidence Interval

A set of values, obtained from sample data, that probably includes the value of an unspecified population parameter, given a certain confidence level.

Point Estimate

A solitary figure or statistical measure employed to approximate the worth of a population parameter.

Confidence Interval

A portfolio of values, extracted from sampling efforts, believed to encapsulate the undiscovered value of a population attribute.

Normal Distribution

A balanced probability distribution around the mean, demonstrating that occurrences are more frequent near the mean than away from it.