When the Interest Rate Is Zero Which of the Following

question 13

Multiple Choice

When the interest rate is zero which of the following is true for a delta-neutral portfolio with a positive gamma?

• A) As gamma increases theta becomes more positive
• B) As gamma decreases theta declines
• C) Theta is zero
• D) As gamma increases theta becomes more negative

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Definitions:

Significant Other

A person of great importance in one's life and deeply influential, often in the context of a close, interpersonal relationship.

Parents

The caregivers of a child who are responsible for their upbringing, including biological, adoptive, or custodial guardians.

Declarative

Pertaining to statements or expressions that provide information or assert something as true.

Procedural

Related to or involving the procedures or steps taken to accomplish a task or process, often emphasizing the method over the result.