An Increase in Which Two of the Following Will Have

question 71

Multiple Choice

An increase in which two of the following will have a negative effect on the value of a put option?
I. risk-free interest rate
II. time to option maturity
III. underlying stock price
IV. option strike price

• A)I and II only
• B)I and III only
• C)II and III only
• D)II and IV only
• E)III and IV only

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Definitions:

Set-Point Model

A theory in psychology that suggests individuals have a pre-set level of happiness or well-being, which is largely stable over time despite changes in circumstances.

Homeostasis

The regulatory process organisms use to maintain stable internal conditions despite external changes.

Teratogens

Substances or agents that can cross the placental barrier and produce fetal deformities when taken or absorbed by the mother during pregnancy.

Genetic Mutations

Permanent alterations in the DNA sequence that makes up a gene, which can result in variations in physical traits and health conditions.