A Sample Space Consists of 154 Separate Events That Are $\frac { 1 } { 154 }$

question 159

Multiple Choice

A sample space consists of 154 separate events that are equally likely. What is the probability of each?

• A) \(\frac { 1 } { 154 }\)
• B) 1
• C) 154
• D) 0

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Definitions:

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy a stock or other underlying asset at a predetermined price within a specified time period.

Put Option

A financial contract allowing the holder to sell a specific amount of an underlying asset at a predetermined price within a specified time frame.

Hedge Ratio

A ratio used to calculate the amount of derivatives needed to hedge a position or portfolio, often used to minimize risk exposure.

Delta

A measure in financial markets that compares the change in the price of a derivative to the change in the price of its underlying asset.