Use the Following to Answer Questions

question 417

Multiple Choice

Use the following to answer questions:
Table: Real and Nominal Output
-(Table: Real and Nominal Output) Look at the table Real and Nominal Output. Assuming year 3 is the base year, real output in year 3 is:

• A)$100.
• B)$120.
• C)$140.
• D)$200.

---

Definitions:

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specified price within a specific time period.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Hedge Ratio

The ratio of the size of a position in a hedging instrument to the size of the position being hedged, intended to minimize risk.

Black-Scholes

A mathematical model used to estimate the price of European-style options, factoring in variables such as stock price, strike price, volatility, time to expiry, and risk-free rate.