A Cash-Or-Nothing Binary Call Option Increases in Value When the Price

question 4

Multiple Choice

A cash-or-nothing binary call option increases in value when the price of the underlying increases.The delta of such an option

• A)Is positive and increases in value as the price of the underlying increases.
• B)can be positive or negative,but increases in value as the price of the underlying increases.
• C)is positive but can increase or decrease in value as the price of the underlying increases.
• D)is equal to the risk-neutral probability of the option finishing in-the-money.

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Definitions:

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Legal contracts or business practices that limit competition or restrict the freedom to operate in a market.

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Not based on or acting according to reason or sound judgement; exceeding the bounds of acceptability or fairness.

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