If You Know That a Call Option Will Be Profitably

question 59

Multiple Choice

If you know that a call option will be profitably exercised then the Black-Scholes model price will simplify to _______.

• A) S₀ - X
• B) X - S₀
• C) S₀ - PV(X)
• D) PV(X) - S₀

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Definitions:

Stimulus Discrimination

The learned ability to differentiate between a conditioned stimulus and other stimuli that have not been paired with an unconditioned stimulus.

Classical Conditioning

A training method where two signals are consistently associated with each other; a reaction initially triggered by the second signal ultimately becomes triggered by just the first signal alone.

Stimulus Generalization

The process by which a conditioned response is triggered by stimuli that are similar but not identical to the original conditioned stimulus.

Learned Helplessness

A condition in which a person suffers from a sense of powerlessness, arising from a traumatic event or persistent failure to succeed, characterized by a lack of initiative, effort, or persistence.