The Delta of a Up-And-Out Call Option with Barrier $H$ Lying Above the Strike

question 21

Multiple Choice

The delta of a up-and-out call option with barrier $H$ lying above the strike $K$ is most likely to be negative when

• A)The underlying stock price \(S\)
• Is at or near
• \(K\)
• )
• B)The underlying stock price \(S\)
• Is close to and less than
• \(H\)
• )
• C)The underlying stock price \(S\)
• Is well below
• \(K\)
• )
• D)The delta of a call cannot be negative.

---

Definitions:

Loss

An accounting term that represents the excess of expenses over revenues in a specific period, leading to a decrease in equity.

Disaggregation

Disaggregation involves breaking down financial information or data into smaller, more detailed components, often for analytical purposes.

Operating Profit

Earnings before interest and tax (EBIT), indicating the profit a company makes from its normal business operations.

Loss Figures

Financial metrics indicating the amount of money a business has lost over a specific period.