A Derivative with a Convex Payoff-Profile at Some Point Before

question 363

Multiple Choice

A derivative with a convex payoff-profile at some point before the option's maturity is a simple plan vanilla option. As the option becomes progressively more-in-the money, the rate at which the position makes money increases until a sympathetically approaches the linear payoff of the future. Similarly, as the option becomes progressively more out-of - the money, the rate at which the position loses money decreases until that rate becomes zero. This is an example of:

• A) Spot rate
• B) Non linear derivate
• C) Linear derivate
• D) None of these

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Definitions:

T Slot

A slot or channel shaped like the letter "T," designed to accept and hold a T-head bolt or nut, commonly used in workbenches, machine tables, and other fixtures.

Dovetail

A joining technique utilizing interlocking tenons and mortises resembling a dove's tail, commonly used in woodworking for strong, precise fits.

Symbol For Symmetry

A notation or mark used to indicate that a feature or part of a design is symmetrical about a particular axis.

Angular Dimension

A type of dimension on a drawing that specifies the angle between two lines or planes.