Which of the Following Factors Would Tend to Increase the Size

question 34

Multiple Choice

Which of the following factors would tend to increase the size of the premium on an options contract?

• A)The option is near its expiration date.
• B)The current default-risk-free interest rate is high.
• C)The price volatility of the underlying asset is low.
• D)The option is far away from its expiration date.

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Definitions:

Fixed-Interval Reinforcement

Giving out a reward after a certain amount of time has passed.

Variable-Interval Reinforcement

Giving out a reward after a random amount of time has passed.

Fixed-Ratio Reinforcement

Giving out a reward after a certain number of behaviors.

Positive Reinforcement

A process in psychology where behaviors are increased or strengthened by providing a reward or positive outcome after the desired behavior is performed.