Relative to the Underlying Stock, a Call Option Always Has

question 66

Multiple Choice

Relative to the underlying stock, a call option always has:

• A)a higher beta and a higher standard deviation of return.
• B)a lower beta and a higher standard deviation of return.
• C)a higher beta and a lower standard deviation of return.
• D)a lower beta and a lower standard deviation of return.

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Definitions:

Quick Ratio

A liquidity metric that measures a company's ability to cover its short-term obligations with its most liquid assets, excluding inventory.

Accounts Receivable

Company receivables originating from goods or services offered to customers who haven't yet completed payment.

Accounts Payable

Funds that a company is required to pay to its suppliers for products or services received but for which payment has not yet been made.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, by comparing its current assets to its current liabilities.