Determine Whether the Statement Is True or False

question 110

Multiple Choice

Determine whether the statement is true or false. If it is true, explain why it is true. If it is false, give an example to show why it is false. ​
If gives rise to a (constrained) relative extremum of subject to the constraint , then , and , simultaneously.
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• A) Let and , then the point gives rise to a (constrained) relative extremum(minimum), and , so the statement is false.
• B) Let and , then the point gives rise to a (constrained) relative extremum(minimum), and , so the statement is true.

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Definitions:

Seller Of A Put

An investor who sells put options in the expectation that the underlying stock price will remain above the option's strike price.

Purchase Shares

The act of buying ownership units in a company, often done through a stock exchange, to potentially earn dividends or sell at a higher price in the future.

Selling A Call Option

The action of granting someone the right, but not the obligation, to buy a specific amount of the underlying asset at a set price within a specified time frame.

Obligation To Sell

A commitment or requirement to sell an asset or security, often arising from a contractual agreement.