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:

Perfectly Inelastic

A situation where the quantity demanded or supplied of a good does not change in response to a change in price.

Relatively Elastic

Describes a situation where the demand for a product is sensitive to changes in price, meaning a small price change can lead to a large change in quantity demanded.

Productivity

A measure of the efficiency of production, often quantified as the ratio of outputs produced to inputs used in the production process.

Pasture Land

Land that is used for the grazing of livestock, allowing animals to feed on the grass and other vegetation present.