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:

Logical Thinking

The process of reasoning consistently and systematically to come to a conclusion.

Authoritarian

Describes a governing style characterized by strong central power and limited political freedoms.

Authoritative

Characterized by or exhibiting power or authority, often used to describe a commanding figure or a definitive source of information.

Inconsistent

Lacking in uniformity, stability, or agreement.