Which of the Following Statements Is NOT True of the VIX

question 55

Multiple Choice

Which of the following statements is NOT true of the VIX?

• A) It is calculated based on prices of call and put options of the S&P 500.
• B) Investors who want to hedge against stock market volatility can sell VIX options.
• C) A VIX of 10 indicates investors expect the S&P 500 to fluctuate by 10% at an annual rate over the next 30 days.
• D) The VIX is a measure of fear in the stock market.

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Definitions:

Japanese Government

The national government of Japan, characterized by a constitutional monarchy and a parliamentary government.

Producer Surplus

The difference between the amount producers are willing to sell a good for and the amount they actually receive.

Tariff

A tax imposed by a government on goods and services imported from other countries to protect domestic industries.

Sugar

A sweet-tasting, soluble carbohydrate found in many plants and used as a sweetener in food and beverages.