The Dollar Change in the Value of a Stock Call

question 52

Multiple Choice

The dollar change in the value of a stock call option is always

• A) lower than the dollar change in the value of the stock.
• B) higher than the dollar change in the value of the stock.
• C) negatively correlated with the change in the value of the stock.
• D) higher than the dollar change in the value of the stock and negatively correlated with the change in the value of the stock.
• E) lower than the dollar change in the value of the stock and negatively correlated with the change in the value of the stock.

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Definitions:

Marginal Productivity

is the additional output resulting from using one more unit of a particular input, holding all other inputs constant.

Hourly Wage

The rate of pay employees receive for one hour of work, an important indicator of labor costs and worker compensation in an economy.

Marginal Resource Cost

The change in total cost that comes from producing one additional unit of a good or service.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production.