Which of the Following Statements Is True

question 56

Multiple Choice

Which of the following statements is true?

• A)The measure used to measure the change in delta as the underlying security price varies is called vega.
• B)The measure used to measure the change in delta as the underlying security price varies is called alpha.
• C)The measure used to measure the change in delta as the underlying security price varies is called beta.
• D)None of the listed options are correct.

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Definitions:

Multifactor APT

Multifactor APT (Arbitrage Pricing Theory) is a theoretical framework that estimates the expected return on a financial asset, considering multiple risk factors and arbitrage opportunities in the market.

Risk-Free Rate

The theoretical rate of return on an investment with no risk of financial loss, typically represented by government bonds.

expected Returns

The anticipated return on an investment or portfolio based on historical data or probabilistic models, accounting for known or foreseeable risks and returns.

Risk-Free Rate

The rate of return on the safest investments, typically government bonds, that investors expect to earn without taking any risk.