As an Option Moves Further Out-Of-The-Money, Delta Moves Toward ________

question 63

Multiple Choice

As an option moves further out-of-the-money, delta moves toward ________.

• A) 1
• B) 0
• C) -1
• D) large negative numbers

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Definitions:

Markup

The amount added to the cost price of goods to cover overhead and profit; the difference between the cost of a product and its selling price.

Marginal Cost

Marginal cost is the change in the total cost that arises when the quantity produced changes by one unit.

Profit-Maximizing

A strategy where a business aims to achieve the highest possible profit from its operations.

Loss-Minimizing

A strategy or approach that aims to reduce or minimize losses in various contexts, including business, investment, and economic activities.