For a $150/£ Call Option with an Initial Premium of $0

question 64

Multiple Choice

For a $1.50/£ call option with an initial premium of $0.033/£ and a lambda of 0.4,after an increase in annual volatility of 1 percent point - for example from 10% to 11% - the new optiom premium would be:

• A) $0.036/£.
• B) $0.037/£.
• C) $0.004/£.
• D) $1.54/£.

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Definitions:

Substantive Due Process

A principle allowing courts to protect certain rights deemed fundamental from government interference, even where procedural protections are present or where those rights are not specifically mentioned elsewhere in the Constitution.

Government Interference

Actions taken by government that affect decisions made by individuals or corporations, often seen in regulatory or policy changes.

Substantive Due Process

A principle that protects the rights of citizens from being violated by laws that are unfair, unreasonable, or arbitrary.

Fundamental Rights

Basic rights and freedoms that are guaranteed to every individual, often protected under the constitution of a country.