For Put Options, the Delta Has a Negative Sign

question 27

Multiple Choice

For put options, the delta has a negative sign

• A)since the value of the put option falls when bond prices rise.
• B)since the value of the put option rises when bond prices rise.
• C)since the value of the put option falls when bond prices fall.
• D)since the change in interest rates is equal to the change in the interest rate on the bond underlying the option contract.
• E)to adjust for basis risk.

---

Definitions:

Underapplied Overhead

Occurs when the allocated manufacturing overhead cost is less than the actual overhead incurred, leading to under-recovered expenses.

Manufacturing Overhead

This includes all the indirect costs associated with manufacturing a product, such as utilities, indirect labor, and maintenance of equipment.

Manufacturing Overhead Applied

The process of assigning manufacturing overhead costs to the units produced, based on a predetermined overhead rate.

Work in Process Account

An inventory account that tracks the costs of products in various stages of completion but not yet finished.