Which of the Following Statements About Implied Volatility Is True

question 54

Multiple Choice

Which of the following statements about implied volatility is true?

• A)VIX is the implied volatility on the Standard and Poor's index, and VXN is the implied volatility on the New York Stock Exchange Index.
• B)VIX is the implied volatility on the Standard and Poor's index, and VXN is the implied volatility on the NASDAQ index.
• C)VIX is the implied volatility on the NASDAQ index, and VXN is the implied volatility on the Standard and Poor's index.
• D)VIX is the implied volatility on the New York Stock Exchange index, and VXN is the implied volatility on the Standard and Poor's index.

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Definitions:

Rate Of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment’s cost.

Required Return

The lowest profit anticipated by an investor from a specific asset or project investment.

Profitability Index

A financial metric that calculates the relative profitability of an investment by dividing the present value of future cash flows by the initial investment cost.

Required Rate

The minimum return an investor expects to achieve by investing in a particular asset, often used in capital budgeting.