The Gamma of an Option Is

question 75

Multiple Choice

The gamma of an option is

• A)the volatility level for the stock that the option price implies.
• B)the continued updating of the hedge ratio as time passes.
• C)the percentage change in the stock call option price divided by the percentage change in the stock price.
• D)the sensitivity of the delta to the stock price.
• E)A and C.

---

Definitions:

Acquisition Transaction

A business operation in which one company purchases most or all of another company's shares to assume control.

Investment

The allocation of resources (such as capital, time, or effort) in the expectation of receiving future benefits or returns.

Credit Balance

The amount of money in a financial repository that surpasses the debit balance and is available for use.

Consolidated Goodwill

The excess value of purchase price over the fair market value of identifiable assets and liabilities acquired during consolidation.