Which of the Following Statements Is False

question 4

Multiple Choice

Which of the following statements is false?

• A) The change in value of a portfolio of puts and calls on the same stock is approximated by the sum of the product of each option's delta with the change in the stock price.
• B) The change in value of a portfolio of puts and calls on the same stock is approximated by the product of the sum of each option's delta with the change in the stock price.
• C) The change in value of a portfolio of puts and calls on the same stock is approximated by the sum of the product of each option's delta with the change in the stock price plus the sum of the cross-correlated changes of each option with the other options for the same change in the stock price.
• D) The change in value of a portfolio of puts and calls on the same stock is approximated by the sum of the product of each option's delta with the change in the stock price plus half the sum of the product of option gammas with squared changes in the stock price.

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Definitions:

Federal Reserve Board

The governing body of the Federal Reserve System, responsible for overseeing the United States' monetary policy and regulating banks.

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Unfair business practices that mislead or deceive consumers, usually regulated by laws to protect consumer rights.

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The process or action of purchasing more than one item or service at a time from the same provider.

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Advertising designed to correct previous misleading or deceptive advertisements.