Which of the Following Statements Is True

question 34

Multiple Choice

Which of the following statements is true?

• A)The delta of an option can be calculated as the option's price divided by the price of the underlying security.
• B)The delta of an option can be calculated as the change in the option's price divided by the change in the price of the underlying security.
• C)The delta of an option can be calculated as the price of the underlying security divided by the price of the option.
• D)The delta of an option can be calculated as the change in the price of the underlying security divided by the change in the price of the option.

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total benefits to society from the trading of goods or services.

Equilibrium Price

The market price at which the quantity of a good demanded equals the quantity supplied, leading to a stable market condition.

Equilibrium Quantity

The quantity of goods or services supplied is equal to the quantity demanded at the market equilibrium price.

Consumer Surplus

The contrast between the aggregate amount buyers are willing to shell out for a good or service and the total they actually do.