Which of the Following Is True Regarding Options

question 113

Multiple Choice

Which of the following is true regarding options?

• A) Options are only traded over-the-counter.
• B) Speculators sell at-the-money put options when they expect that the currency's value will rise.
• C) Speculators purchase at-the-money call options when they expect that the currency's value will fall.
• D) Speculators sell at-the-money currency call options when they expect that the currency's value will rise.

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Definitions:

Fundamentals

The basic elements or principles of a subject, theory, or system.

Over-optimism

Over-optimism refers to the tendency of individuals to hold an unrealistically positive view of the future or the outcomes of events, which can affect decision-making processes.

Unrealistic Belief

A conviction or expectation that does not align with actual facts or evidence, often based on incorrect assumptions or misinformation.

Slope

A measure of the steepness, incline, or grade of a line, calculated as the ratio of the vertical change to the horizontal change between two points.