The Rho of an Option Is Defined As

question 8

Multiple Choice

The Rho of an option is defined as:

• A) expected change in the option premium for a small change in time to expiration.
• B) expected change in the option premium for a small change in volatility.
• C) expected change in the option premium for a small change in the foreign interest rate.
• D) expected change in the option premium for a small change in the domestic interest rate.

Distinguish between the concepts of income effect and substitution effect.

Understand the supply curve and its relationship with price and quantity supplied.

Identify factors that cause shifts in the supply curve.

Describe the concept of market equilibrium and understand how market forces lead to changes in prices and quantities.

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