Which of the Following Could Be a Result of "Crashophobia

question 5

Multiple Choice

Which of the following could be a result of "crashophobia"?

• A) High volatilities for in-the-money calls
• B) High volatilities for in-the-money puts
• C) High volatilities for at-the-money calls
• D) Low volatilities for at-the-money puts

---

Definitions:

Budget Line

A budget line represents the combination of goods and services that a consumer can purchase given their income and the prices of those goods and services.

Consumer's Equilibrium

A state where an individual allocates their income in a way that maximizes their satisfaction or utility, given their budget.

Demand for Product X

The total quantity of Product X that consumers are willing and able to purchase at various price levels, within a given time frame.

Indifference Map

A graphical representation showing different bundles of goods between which a consumer is indifferent, illustrating preferences and trade-offs.