The ________________________,The Greater the Chance of the Option Becoming _____________________

question 96

Multiple Choice

The ________________________,the greater the chance of the option becoming _____________________.

• A)shorter the time to expiration,in-the-money
• B)longer the time to expiration,in-the-money
• C)greater the volatility,in-the-money
• D)two of the above are correct.
• E)none of the above.

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Definitions:

Industry's Short-run

A period in which at least one of a firm's inputs is fixed, limiting the firm's ability to adjust to changes in market demand.

General Equilibrium

A state in which all parts of the economy (supply, demand, prices) are in balance and all markets are at equilibrium.

Market Equilibrium

A situation in which market supply and demand balance each other, and as a result, prices become stable.

Pareto Optimality

A state of allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off.