Gamma Ranges from

question 1

Multiple Choice

Gamma ranges from

• A) 0.00 to 1.00
• B) 1.00 to 100
• C) 0.00 to -1.00
• D) -1.00 to +1.00

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Definitions:

Risk-Loving Investors

Individuals who prefer investments with a high level of risk in the hope of realizing higher returns compared to safer investments.

Rate of Return

The percentage of net gain or loss on an investment over a specified period, showing the efficiency of an investment.

Fair Game

An investment prospect that has a zero risk premium.

Risk Premium

The extra return above the risk-free rate that investors require to compensate them for choosing to invest in a risky asset.