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Option Volatility Is Defined as the Square Root of the Standard

question 71

True/False

Option volatility is defined as the square root of the standard deviation of daily percentage changes in the underlying exchange rate.


Definitions:

ATC

Average Total Cost, the total cost of production divided by the number of units produced, representing the average cost per unit of output.

Profit-Maximizing Rule

A principle that states a firm reaches its highest profit when its marginal cost equals its marginal revenue.

Marginal Revenue

The revenue increase from the sale of one more unit of a product or service.

Marginal Cost

is the increase in total cost that arises from producing one additional unit of a product or service.

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