A Strategy Involving Four Option Contracts Is

question 52

Multiple Choice

A strategy involving four option contracts is:

• A) a butterfly spread.
• B) a put bear spread.
• C) a ratio spread.
• D) a call bull spread.

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Definitions:

Probability

A measure of the likelihood of a specific event or outcome occurring, expressed as a number between 0 and 1.

Expected Utility Function

A concept in economics that quantifies an individual's preference for different outcomes, accounting for risk and uncertainty.

Probability

A numeric expression ranging between 0 and 1 that signifies the chances of an event's occurrence.

Utility

The total satisfaction received from consuming a good or service.