Which of the Following Statements Are Correct

question 72

Multiple Choice

Which of the following statements are correct?
I.Increasing the time to maturity may not increase the value of a European put.
II.Vega measures the sensitivity of an option's value to the passage of time.
III.Call options tend to be more sensitive to the passage of time than are put options.
IV.An increase in time decreases the value of a call option.

• A)I and III only
• B)II and IV only
• C)II, III, and IV only
• D)I, III, and IV only
• E)I, II, III, and IV

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Definitions:

Contingent

Dependent on or conditioned by something else; not absolute or certain.

Pleasant Event

An occurrence or activity that brings joy, satisfaction, or positive feelings to an individual.

Unpleasant Event

An occurrence that is not enjoyable or satisfying, often causing discomfort or distress.

Primary Reinforcer

A naturally reinforcing item or factor, such as food or water, that does not require learning to be effective in increasing the likelihood of a response.