For a $150/£ Call Option with an Initial Premium of $0

question 19

Multiple Choice

For a $1.50/£ call option with an initial premium of $0.033/£ and a lambda of 0.4, after an increase in annual volatility of 1 percent point - for example from 10% to 11% - the new option premium would be:

• A) $0.036/£.
• B) $0.037/£.
• C) $0.004/£.
• D) $1.54/£.

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Definitions:

Burnout

A state of physical, emotional, and mental exhaustion caused by prolonged stress and overwork, often leading to diminished interest and performance.

Serious Effects

Consequences or outcomes of an action or event that are significant and have a profound impact.

Unpredictable Stressors

Unpredictable Stressors are stress-inducing factors or conditions that occur without warning, causing uncertainty and difficulty in coping due to their unforeseen nature.

Predictable

Predictable refers to the quality of being expected or foreseen based on patterns, behaviors, or known information.