When Two or More Events Can Occur Concurrently It Is

question 44

Multiple Choice

When two or more events can occur concurrently it is called

• A) conditional probability.
• B) empirical probability.
• C) joint probability.
• D) a tree diagram.
• E) None of the choices are correct.

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Definitions:

Forward Price

The predetermined price agreed upon in a forward contract, at which the asset will be bought or sold at a future date.

European Call

A call option that can only be exercised on the expiration date, not before.

Strike Price

The Strike Price is the fixed price at which the owner of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity.

Derivative Security

A financial instrument whose value is derived from the value of another asset, known as the underlying asset.