If the Price of an Underlying Asset Has a Standard

question 29

Multiple Choice

If the price of an underlying asset has a standard deviation of zero:

• A) options for this asset would likely not exist.
• B) option for this asset would be highly valued.
• C) the intrinsic value of options for this asset would equal the asset's price.
• D) options for this asset would have a time value of the option equal to the price of the asset.

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Definitions:

Theory of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions, knowledge—to oneself and others and to understand that others have beliefs, desires, and intentions that are different from one's own.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed, a concept developed in early infancy.

Insecure Attachment

A problematic bond between a child and caregiver characterized by fear, anxiety, or uncertainty.

Conservation

The principle in cognitive development where a child understands that quantity remains the same despite changes in its shape or form.