The Dollar Change in the Value of a Stock Call

question 52

Multiple Choice

The dollar change in the value of a stock call option is always

• A) lower than the dollar change in the value of the stock.
• B) higher than the dollar change in the value of the stock.
• C) negatively correlated with the change in the value of the stock.
• D) higher than the dollar change in the value of the stock and negatively correlated with the change in the value of the stock.
• E) lower than the dollar change in the value of the stock and negatively correlated with the change in the value of the stock.

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Definitions:

Innate Patterns

Refers to behaviors or actions that are genetically hardwired and manifest without the need for learning or experience.

Biologically Determined

Traits, behaviors, or characteristics that are influenced by genetic makeup rather than environmental factors.

Instinct

Natural, unchanging behaviors exhibited by animals in reaction to specific triggers.

Drive-Reduction

A theory of motivation that posits the reduction of physiological needs drives behavior towards achieving homeostasis.