The Theta of an Option Is Defined As

question 83

Multiple Choice

The Theta of an option is defined as:

• A) expected change in the option premium for a small change in time to expiration.
• B) expected change in the option premium for a small change in volatility.
• C) expected change in the option premium for a small change in the spot rate.
• D) expected change in the option premium for a small change in the domestic interest rate.

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Definitions:

September

In the Gregorian calendar, it is the month that falls ninth in the sequence.

Variable Cost

Expenses that change in proportion to the level of production or sales activity.

Units Sold

The total quantity of goods that have been purchased by customers during a specific time period.

Fixed Manufacturing Cost

Expenses that do not change with the level of production, such as rent, salaries, and equipment maintenance.