Which of the Following Is True Regarding the Options Markets

question 41

Multiple Choice

Which of the following is true regarding the options markets?

• A) Hedgers and speculators both attempt to lower risk.
• B) Hedgers attempt to lower risk, while speculators attempt to make riskless profits.
• C) Hedgers and speculators are both necessary in order for the market to be liquid.
• D) all of the above

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Definitions:

F Value

A statistic obtained in analysis of variance (ANOVA) testing, used to determine whether the means of several groups are equal or show significant differences.

F-Tests

A group of statistical tests that compute the ratio of variances to analyze the statistical significance of the differences between means.

Nondirectional

Pertains to hypotheses or tests that do not specify a direction of effect but instead test for any difference or association.

Type II Error

The probability of accepting a null hypothesis when it is false.