Which of the Following Statements Is True About the Relationship

question 21

Multiple Choice

Which of the following statements is true about the relationship between the option price and the risk-free rate?

• A)a call price is nearly linear with respect to the risk-free rate
• B)a call price is highly sensitive to the risk-free rate
• C)the risk-free rate affects a call but not a put
• D)the risk-free rate does not affect a call price
• E)none of the above

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Definitions:

Bacon's Rebellion

A 1676 rebellion in the Virginia Colony, led by Nathaniel Bacon, which was an early rebellion against the colonial government by settlers.

Virginia's Elite

Refers to the affluent and influential social class in Virginia, historically significant in American colonial and early national periods.

Consolidation Of Power

The process by which a person or group centralizes control within a political or organizational structure, often reducing the power of other entities or individuals.

English Toleration Act

A law enacted in 1689 that granted freedom of worship to nonconformists in England, albeit with several restrictions.