A Digital Default Option Is a Call Option Whose Payoff

question 50

True/False

A digital default option is a call option whose payoff increases as a yield spread increases above a stated exercise spread.

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Definitions:

Diseases

Medical conditions characterized by an abnormal state affecting the body or mind, often associated with specific symptoms and signs.

Stress

A condition of psychological stress or pressure stemming from difficult or challenging situations.

Symptoms

Physical or mental features indicating a condition or disease, experienced by an individual.

Disease

A disorder of structure or function in a human, animal, or plant, especially one that produces specific symptoms or affects a specific location and is not simply a direct result of physical injury.