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:

Terminal Buttons

Terminal buttons are the small nodules at the end of axons that release chemical neurotransmitters, which facilitate the transmission of signals from one neuron to another.

Axons

Long, threadlike parts of a nerve cell along which impulses are conducted from the cell body to other cells.

Dendrites

Branch-like extensions of neurons that receive signals from other neurons and transmit them toward the cell body.

Synaptic Cleft

The small gap between neurons at a synapse, through which neurotransmitters are released to transmit signals to adjacent neurons.