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

---

Definitions:

Olowe Of Ise

A celebrated Yoruba artist from Nigeria, known for his masterful wood carvings and sculptures crafted in the early 20th century.

Kongo Nkisi N'kondi

A power figure from the Kongo culture, intended to house spirits, using nails and blades to activate its spiritual potency.

Embody Spirits

To represent or manifest spiritual beings or principles in a tangible or physical form.

Supernatural Forces

Powers or entities beyond scientific understanding or the laws of nature, often involved in religious, mythological, or spiritual beliefs.