Which of the Following Describes a Long Position in an Option

question 16

Multiple Choice

Which of the following describes a long position in an option?

• A) A position where there is more than one year to maturity
• B) A position where there is more than five years to maturity
• C) A position where an option has been purchased
• D) A position that has been held for a long time

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Definitions:

Hypothesis Testing

A statistical method that uses sample data to evaluate a hypothesis about a population parameter, leading to a decision to accept or reject the hypothesis.

Test Statistic

A numerical value calculated from a sample of data used in statistical testing to determine whether to reject the null hypothesis.

T-Distribution

A probability distribution used in statistics, especially in scenarios with small sample sizes, that is symmetric, bell-shaped, and slightly thicker and longer-tailed than the normal distribution.

Sample Mean

The average value of a sample set, calculated by summing all observations and dividing by the number of observations.