A Call Option on the ABCD Stock, with an Exercise

question 45

Multiple Choice

A call option on the ABCD stock, with an exercise price of $50, is selling for $5.00 and the stock price is also $50. The call option has a delta of 0.3. If within a short period of time the stock price increases to $52, what would be the change in the price of the call option?

• A) increases by $0.60
• B) decreases by $0.60
• C) increases by $2.00
• D) decreases by $2.00

Recognize the increasing demand for social responsibility from employers by employees and the public.

Appreciate the historical focus of HR departments and the evolution towards a more strategic role.

Grasp the impact of advanced technology on job requirements and the labour market.

Understand the functionality and benefits of a Human Resource Information System (HRIS) in decision making and control.

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Definitions:

Type I Error

The mistake of wrongly rejecting a true null hypothesis.

Level Of Significance

The threshold chosen for determining whether a statistical result obtained is deemed significant, typically represented as a probability value (p-value).

Sample Size

The number of observations or data points collected for the purpose of statistical analysis.

One-Tail P-Value

The probability, in hypothesis testing, of observing a test statistic as extreme as, or more extreme than, the value observed under the assumption that the null hypothesis is true, in one direction.