If the Share Price at the Expiry of a Call

question 38

Multiple Choice

If the share price at the expiry of a call option is less than the exercise price,the call is worth:

• A)zero.
• B)the difference between the exercise price and the share price.
• C)the market price of the share.
• D)an undefined amount.

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Definitions:

Two-tail

A term used in statistical tests where the critical region is split between both ends of the distribution, testing for either significantly greater or lesser outcomes than the expected value.

Kruskal-Wallis Test

A non-parametric method for testing whether samples originate from the same distribution, often used as an alternative to one-way ANOVA when the assumptions of ANOVA are not met.

ANOVA F Test

A statistical test used to determine if there are any statistically significant differences between the means of three or more independent groups.

Completely Randomized Experiments

Experimental designs where all subjects are allocated to groups based only on chance, reducing systematic bias.