Which of the Following Is True for a Call Option

question 3

Multiple Choice

Which of the following is true for a call option on a non-dividend-paying stock?

• A) If the option is at the money (stock price equals strike price) it must have a delta of 0.5
• B) If the strike price equals the forward price of the stock, it must have a delta of 0.5
• C) If the option has a delta of 0.5, it must be out of the money
• D) If the option has a delta of 0.5, it must be in of the money

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Definitions:

Tit-For-Tat

A strategy in conflict or competition where actions are reciprocated with similar actions in retaliation or cooperation.

Forgive Others

The process of letting go of resentment, anger, or claims against someone else who has committed an offense, wrongdoing, or mistake against oneself.

Reciprocity Norm

A social norm that expects individuals to help those who have helped them, fostering a culture of mutual aid and support.

Emergency Help

Immediate assistance or aid provided during a crisis or when someone is in need.