The Two State OPM Is So Named Because

question 51

Multiple Choice

The two state OPM is so named because:

• A) there is only two specific outcomes in the future period.
• B) the probability of price increase equals the probability of a price decrease.
• C) only two interest rates are used.
• D) only two arbitrage positions can be established.

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Definitions:

Hedge Fund

A private investment partnership that uses complex strategies and investments to generate high returns for its investors.

Acquisitions

The process by which one company takes over another, either by purchasing it outright or through a merger.

SEC Oversight

The supervisory role of the Securities and Exchange Commission in regulating and enforcing federal securities laws.

Regulatory Oversight

The supervisory activities conducted by a governmental or regulatory body to ensure compliance with laws, regulations, and standards.