A Cash-Or-Nothing Binary Call Option Increases in Value When the Price

question 33

Multiple Choice

A cash-or-nothing binary call option increases in value when the price of the underlying increases. The delta of such an option

• A) Is positive and increases in value as the price of the underlying increases.
• B) can be positive or negative, but increases in value as the price of the underlying increases.
• C) is positive but can increase or decrease in value as the price of the underlying increases.
• D) is equal to the risk-neutral probability of the option finishing in-the-money.

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Definitions:

Attachment

The deep emotional bond that develops between a child and a caregiver, providing the child with emotional security.

Bowlby

John Bowlby was a British psychologist and psychiatrist known for developing attachment theory, which describes the dynamics of long-term relationships between humans.

Secure Attachment

A type of emotional bond characterized by trust and a sense of security, typically formed between a child and their caregiver.

Caregiver

An individual responsible for attending to the needs and wellbeing of another person, often in contexts of health care, child care, or elder care.