If the Delta of a Call Option Is 0

question 42

Multiple Choice

If the delta of a call option is 0.4, calculate the delta of an equivalent put option.

• A)0.6
• B)0.4
• C)−0.4
• D)−0.6

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Definitions:

Bond Premium Amortization

The process of gradually expensing the premium paid over the par value of a bond over its life.

Effective Yield

The total yield of a bond once all charges are factored in, expressed as an annual percentage.

Present Value Factors

Numeric factors used to calculate the present value of a future amount, taking into account a specific interest rate and time period.

Bond Discount

The variance between the face value of a bond and the price at which it's sold, occurring when the bond sells below its face value.