The Delta of a Cash-Or-Nothing Binary Call Option and the Gamma

question 40

Multiple Choice

The delta of a cash-or-nothing binary call option and the gamma of such an option

• A) is always positive; is always positive.
• B) is always positive; can be positive or negative.
• C) can be positive or negative; is always positive.
• D) can be positive or negative; can be positive or negative.

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Definitions:

Variables

Any factor, trait, or condition that can exist in differing amounts or types and can affect the outcomes of scientific research.

Confounds

Variables that could potentially interfere with the outcome of an experiment, making it difficult to isolate the effects of the experimental variables.

Theory Construction

The process of developing a systematic framework to understand and explain phenomena, based on empirical evidence and logical reasoning.

Iterative Process

A method of solving a problem by repeatedly applying a sequence of operations until a desired outcome is reached.