Consider an At-The-Money Call Option on the Maximum of Two

question 2

Multiple Choice

Consider an at-the-money call option on the maximum of two assets.As the correlation between the two assets increases,what happens to the value of this option?

• A)It decreases.
• B)It stays the same.
• C)It increases.
• D)There is not enough information to answer this question.

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Definitions:

Accountable

Accountable means being responsible or answerable for actions or decisions, both in terms of the processes followed and the outcomes achieved.

Liable

Legally responsible or obligated, often referring to the duty to compensate for harm or damage caused.

Blended Value Theorists

Individuals or scholars who advocate for combining social and financial returns in investment and organizational strategy.

Environmental Component

aspects of a project or plan that specifically relate to the natural environment, including considerations of sustainability and ecological impact.