Which of the Following Statements Is Valid for European Options

question 2

Multiple Choice

Which of the following statements is valid for European options?

• A)The gamma of a call is positive and that of a put is negative.
• B)The gamma of a call is negative and that of a put is negative.
• C)The gamma of a call is negative and that of a put is positive.
• D)The gamma of a call is positive and that of a put is positive.

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Definitions:

Forward Rate

An agreed-upon price for a financial transaction that will occur at a future date.

Direct Quote

A quotation in the foreign exchange market that expresses the amount of foreign currency required to buy or sell one unit of the domestic currency.

Direct Quote

A report of the exact words used by a speaker or writer, typically enclosed in quotation marks.

British Pounds

The official currency of the United Kingdom, also known as GBP or Sterling, used as a benchmark currency internationally.