Which of the Following Statements Is INCORRECT

question 16

Multiple Choice

Which of the following statements is INCORRECT?

• A) An option's delta measures the change in the option's value when there is a small change in the underlying stock price.
• B) The delta of a call option lies between 0 and 1.
• C) The delta of a put option lies between -1 and 0.
• D) An option's gamma is the change in the option's delta when there is a small change in the underlying stock price.
• E) The gamma for otherwise identical European put and call options on the same stock are different.

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Definitions:

Inventory Levels

The quantity of goods or materials on hand at any given time within a business.

Additional Production

Extra units of output generated beyond the original production plan or schedule.

Factory Overhead Cost Variance Report

Reports budgeted and actual costs for variable and fixed factory overhead along with the related controllable and volume variances.

Standard Factory Overhead Cost

The predetermined estimate of indirect manufacturing costs that are expected to be incurred during a period.