Which of the Following Statements Is NOT True of the VIX

question 55

Multiple Choice

Which of the following statements is NOT true of the VIX?

• A) It is calculated based on prices of call and put options of the S&P 500.
• B) Investors who want to hedge against stock market volatility can sell VIX options.
• C) A VIX of 10 indicates investors expect the S&P 500 to fluctuate by 10% at an annual rate over the next 30 days.
• D) The VIX is a measure of fear in the stock market.

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Definitions:

Alarm Stage

The first stage of the general adaptation syndrome, in which the person experiences a burst of energy that aids in dealing with the stressful situation.

Resistance Stage

The second phase of the general adaptation syndrome, where the body adapts to and resists stressors with increased performance of various defensive mechanisms.

Selye's GAS

A theory proposed by Hans Selye that describes the body's physiological response to stress in three stages: alarm reaction, resistance, and exhaustion.

Prisoner of War

A person who is captured and held by an enemy during conflict or war, typically under international law guidelines.