Stocks That Have More Volatile Price Changes Have More Valuable

question 34

Multiple Choice

Stocks that have more volatile price changes have more valuable call options because call holders:

• A) capture upside potential without downside risk.
• B) realize that volatility decreases the present value of the exercise price.
• C) have too little variability in the exercise price.
• D)have transferred all risk to put holders.

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Definitions:

Parental Response

The reaction or behavior of parents in response to a certain behavior, need, or demand from their children.

Similarly

In a manner that shows likeness or comparability in aspects, characteristics, or effects.

Evolutionary Psychology

The theoretical approach in psychology that attempts to explain useful mental and psychological traits—such as memory, perception, or language—as adaptations, i.e., as the functional products of natural selection.

Competitive Dispositions

The inherent or developed inclination of individuals or groups to engage in competition, striving to outperform others or achieve superiority.