The Delta of an Option Is

question 455

Multiple Choice

The delta of an option is:

• A) The sensitivity of the option value to changes in interest rates
• B) The sensitivity of the option value to changes in volatility
• C) The sensitivity of the option value to changes in the time to expiry
• D) The sensitivity of the option value to changes in the price of the underlying

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Definitions:

Date of Record

The date set by a company on which the shareholders must be registered to be eligible for dividends or other benefits.

Penny Stocks

Refers to shares of small companies traded at very low prices, often considered highly speculative.

Underpricing

The practice of setting the initial stock price below its intrinsic value during an initial public offering (IPO).

Dilution Effects

In finance, the decrease in existing shareholders' ownership percentage of a company as a result of the company issuing more shares.