The Vega of an Option Measures

question 70

Multiple Choice

The vega of an option measures:

• A)interest rate risk
• B)volatility risk
• C)off-balance-sheet risk
• D)price elasticity

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Definitions:

Inoculation

The process of introducing a vaccine into the body to induce immunity against a specific disease.

Forewarning

Advance knowledge that one is to be the target of a persuasion attempt. Forewarning often produces resistance to persuasion.

Induced Compliance

A psychological situation where individuals are subtly coerced into behaving in ways that contradict their beliefs or attitudes, often leading to attitude change.

Group Norms

The shared expectations and rules that guide the behavior of people within social groups.