Which of the Following Statements Is FALSE

question 19

Multiple Choice

Which of the following statements is FALSE?

• A)Out-of-the-money calls have the highest expected returns and out-of-the-money puts have the lowest expected returns.
• B)The expression SΔ/(SΔ +B)is the ratio of the amount of money in the stock position in the replicating portfolio to the value of the replicating portfolio (or the option price);it is known as the leverage ratio.
• C)The beta of a portfolio is just the weighted average beta of the constituent securities that make up the portfolio.
• D)The magnitude of the leverage ratio for options is usually very small,especially for out-of-the-money options.

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Definitions:

Accommodating Emotional Style

A behavioral approach that prioritizes others' emotional needs and seeks to adjust oneself to bring comfort or harmony in interactions.

Workplace

A place where people are employed and carry out tasks related to their jobs.

Self-disclosure

A process in interpersonal interactions where individuals share personal, private, or sensitive information about themselves with others, fostering intimacy or trust.

Stress Relief

Activities or practices that reduce tension and anxiety, promoting emotional and physical well-being.