Which One of the Following Statements Concerning Option Prices Is

question 42

Multiple Choice

Which one of the following statements concerning option prices is correct?

• A)There is a relatively linear direct relationship between the volatility of the underlying stock price and option prices.
• B)Call option prices decrease and put option prices increase as the time to expiration increases.
• C)Put option prices are directly related to the price of the underlying stock.
• D)The relationship between option prices and stock prices is a linear relationship.
• E)Delta measures the effect that the underlying stock's dividend yield has on option prices.

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Definitions:

Regressive Taxes

Taxes that take a larger percentage of income from low-income earners than from high-income earners, disproportionally burdening the former.

Feudalism

A medieval European social system in which land was held by nobles in exchange for military service, and vassals were in turn tenants of the nobles, while the peasants were obligated to live on their lord's land and give him homage, labor, and a share of the produce.

Expansion Of Exploration

The process or act of searching for new knowledge, resources, or territories.

Subsequent Increasing Demand

Refers to the phenomenon where demand for a product or service increases following a certain event or development.