Which of the Following Is True for a Long Position

question 14

Multiple Choice

Which of the following is true for a long position in an option

• A) Both gamma and vega are negative
• B) Gamma is negative and vega is positive
• C) Gamma is positive and vega is negative
• D) Both gamma and vega are positive

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Definitions:

Increasing-Cost Industry

An industry in which the costs of production increase as the industry expands, typically due to factors such as input limitations or regulation.

Pure Competition

An idealized market structure featuring numerous buyers and sellers, free entry and exit, and completely homogeneous products, resulting in the inability of any single firm to influence the market price.

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a long period, taking into account all possible changes in inputs and technology.

Horizontal Curve

A curve on a graph that shows an unchanged value over time or is parallel to the horizontal axis.