Surplus Is

question 13

Multiple Choice

Surplus is:

• A) a measure of the value that buyers and sellers get from participating in a market
• B) maximized for individuals whose willingness to pay equals the market price.
• C) negative for all individuals who do not participate in a market.
• D) All of these are correct.

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Definitions:

Volatility

A statistical measure of the dispersion of returns for a given security or market index.

Delta

A measure in options trading that indicates how the price of an option is expected to change relative to a one-unit change in the price of the underlying asset.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a fixed period of time.

Binomial OPM

A mathematical model used to price options, considering multiple potential outcomes and the time value of money.