The Value of an Option (Both Call and Put) Is

question 62

Multiple Choice

The value of an option (both call and put) is positively related to:
I. volatility of the underlying stock price
II. time to expiration
III. risk-free rate

• A) I and II only
• B) II and III only
• C) I and III only
• D) III only

Discern the importance and methods of competitive differentiation within industries.

Understand the relationship between technology and capital and their roles as factors of production.

Comprehend the significance of ethical practices for business success.

Recognize the role of innovation, risk-taking, and strategic alliances in entrepreneurship and business strategy.

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Definitions:

Consumer Goods

Products and services that are consumed by individuals or households for personal satisfaction and daily use.

Capital Goods

Physical assets utilized by businesses to produce goods and services, such as buildings, machinery, and equipment.

Allocation of Resources

The process of distributing scarce resources among various uses or activities in a way that maximizes the achievement of objectives.

Production Possibilities Curve

A visual diagram displaying the highest achievable production combinations of two products or services within an economy, assuming all resources are used completely and effectively.