What Does Gamma Measure

question 12

Multiple Choice

What does gamma measure?

• A) The rate of change of delta with the asset price
• B) The rate of change of the portfolio value with the passage of time
• C) The sensitivity of a portfolio value to interest rate changes
• D) None of the above

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Definitions:

Conservation

The principle that certain properties remain the same despite changes in the form of objects, or understanding the permanence of quantity despite changes in the shape or container.

Egocentrism

A cognitive characteristic in which an individual has difficulty seeing the world from perspectives other than their own, often observed in early childhood development.

Object Permanence

The realization that objects still exist even when they are not perceivable through sight, hearing, touch, smell, or any sensory means.

Egocentrism

A cognitive bias that causes individuals to interpret the world from their own perspective, often failing to understand that others may have different points of view.