Which of the Following Statements Is True

question 18

Multiple Choice

Which of the following statements is true?

• A)In general, the relationship between the value of an option and the underlying value of a security is non-linear.
• B)For an out-of-the money call option the price of the underlying security is less than the option's exercise price.
• C)Using the delta method to derive the market value of an option is at best an approximation and to deal with the non-linearity of option payoffs, some analysts consider an option's gamma too.
• D)All of the listed options are correct.

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Passive Voice

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