Vega Is Defined as

question 55

Multiple Choice

Vega is defined as

• A) the change in the value of an option for a dollar change in the price of the underlying asset.
• B) the change in the value of the underlying asset for a dollar change in the call price.
• C) the percentage change in the value of an option for a 1% change in the value of the underlying asset.
• D) the change in the volatility of the underlying stock price.
• E) the sensitivity of an option's price to changes in volatility.

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Definitions:

Tariff

A tax on goods produced abroad and sold domestically.

Exchange Rate

The price of one currency in terms of another, determining how much foreign currency can be obtained with a unit of domestic currency.

Net Exports

The value of a country's total exports minus its total imports, representing the net trade of goods and services with other countries.

Net Capital Outflows

The value of domestic assets purchased by foreigners minus the value of foreign assets purchased by residents of a country.