Which of the Following Are NOT True

question 11

Multiple Choice

Which of the following are NOT true

• A) Risk-neutral valuation and no-arbitrage arguments give the same option prices
• B) Risk-neutral valuation involves assuming that the expected return is the risk-free rate and then discounting expected payoffs at the risk-free rate
• C) A hedge set up to value an option does not need to be changed
• D) All of the above

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Definitions:

Inventory Management

The practice of overseeing and controlling the ordering, storage, and use of components that a company uses in the production of the items it sells.

Supply Chain Management

The oversight of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer.

Work In Process

Inventory or products that are in the production process but are not yet completed, representing a stage between raw materials and finished goods.

Just-In-Time (JIT) Scheduling

Minimises inventory by routing materials to workstations ‘just in time’ to be used.