Relative to the Underlying Stock, a Call Option Always Has

question 66

Multiple Choice

Relative to the underlying stock, a call option always has:

• A)a higher beta and a higher standard deviation of return.
• B)a lower beta and a higher standard deviation of return.
• C)a higher beta and a lower standard deviation of return.
• D)a lower beta and a lower standard deviation of return.

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Definitions:

Operating Activities

Activities that relate directly to the primary operations of a company, such as sales and service activities, and are reflected in the company's cash flows.

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been subtracted from total revenue.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired, reflecting its decrease in value over time.

Cash Dividends

Payments made by a corporation to its shareholders out of its profits or reserves.