The Elasticity of an Option Is

question 88

Multiple Choice

The elasticity of an option is

• A) the volatility level for the stock that the option price implies.
• B) the continued updating of the hedge ratio as time passes.
• C) the percentage change in the stock call-option price divided by the percentage change in the stock price.
• D) the sensitivity of the delta to the stock price.

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Definitions:

Interpretations

The act of explaining the meaning of something; understanding or explanation of a concept, text, or action.

Socks

Clothing items worn on the feet, typically made from fabric or wool, designed to absorb moisture and provide warmth.

Higher-Order Conditioning

A form of learning in which a stimulus is first made meaningful or consequential through its association with another stimulus, and then that stimulus is used as a basis for learning about some new stimulus.

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus.