Which of the Following Statements Is True Regarding Equity Options

question 48

Multiple Choice

Which of the following statements is true regarding equity options contracts?

• A) The majority of options contracts are standardized.
• B) Investors typically create options contracts to trade amongst themselves.
• C) Options contracts are typically customized to suit the needs of each investor.
• D) Options are available on all publicly-traded U.S. stocks.

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Definitions:

Coefficient Of Determination

A measure, usually represented as R^2, that shows the proportion of the variance in the dependent variable that is predictable from the independent variable(s).

Variance

A measurement of the spread between numbers in a data set, signaling how far each number in the set is from the mean.

MSE

Mean Squared Error, a measure of the average squared differences between the estimated values and the actual value, indicating the quality of an estimator.

SSE

Sum of Squares due to Error, a measure used in statistical analysis to quantify the discrepancy between the observed and predicted data values.