If an Option Pays $6 One-Quarter of the Time and Loses

question 15

Multiple Choice

If an option pays $6 one-quarter of the time and loses $6 three-quarters of the time,then the variance $\sigma$ ² = :

• A) 0.
• B) -3.
• C) 9.
• D) 12.
• E) 27.

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Definitions:

Runoff

Water from rain, snowmelt, or other sources that flows over the land surface and is not absorbed into the ground, potentially carrying pollutants to bodies of water.

Underground Mine

A type of mine where natural resources, like minerals or ores, are extracted from beneath the Earth's surface through tunnels or shafts.

Low-Grade Ore

Mineral ore containing a smaller amount of valuable metals or minerals compared to high-grade ore, making extraction less economical.

Natural Environment

The physical, chemical, and biological factors along with their interactions that constitute the Earth's natural settings, including forests, rivers, lakes, and atmosphere.