The Procedure for Revising Probabilities Based Upon Additional Information Is

question 31

Multiple Choice

The procedure for revising probabilities based upon additional information is referred to as:

• A)utility theory.
• B)Bernoulli's theorem.
• C)central limit theorem.
• D)Bayes Law.

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Definitions:

Expiration Date

The last day on which an option or derivative contract is valid, after which it either becomes worthless or is automatically settled.

American Put Option

A derivative security that gives the holder the right, but not the obligation, to sell a specified quantity of an underlying asset at a set price within a specified time.

Striking Price

The specified price at which the holder of an option can buy (call option) or sell (put option) the underlying asset.

Expiration Date

The specific date on which an options contract or other financial instrument becomes void and the rights under it cease to exist.