The Sensitivity of the Option Premium to a Small Change

question 6

True/False

The sensitivity of the option premium to a small change in the spot exchange rate is called the gamma.

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Definitions:

Weighted-Average Method

A method of inventory costing that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold.

First-In, First-Out Method

An inventory valuation method where goods purchased or produced first are sold or used first, often used in the accounting of inventory costs.

Mixing Department

A section in a production facility where ingredients or components are combined to produce a final product or a mixture.

Equivalent Units

A concept used in cost accounting to standardize the quantity of production output, facilitating the calculation of costs per unit in processes with partial completion.