The Sensitivity of the Option Premium to a Small Change

question 6

True/False

The sensitivity of the option premium to a small change in the spot exchange rate is called the gamma.

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Definitions:

Constraint

A limitation or condition that must be satisfied by a system, process, or variable, often used in optimization and database management.

Changing Cell

In spreadsheet applications, a cell whose value is altered based on changes in a formula or as part of a scenario analysis.

Objective Cell

In optimization and spreadsheet software, the cell that contains the formula that is to be maximized or minimized.

Goal Seek

A function in spreadsheet software that finds the input value needed to achieve a specific goal or result in a formula.