If an Option's Price Increases 1

question 8

Multiple Choice

If an option's price increases 1.4 percent for every 2 percent change in the price of the underlying security, what is the value of the option's delta?

• A)0.60.
• B)1.40.
• C)0.70.
• D)2.00.
• E)3.00.

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Definitions:

Equilibrium Price

The price at which the quantity of goods demanded equals the quantity of goods supplied, leading to market stability.

Ineffective

Not producing the intended or desired effect.

Economic Cost

The total cost of choosing one action over another, including both direct costs and any lost opportunity costs.

Utility

The satisfaction or benefit derived from consuming goods and services.