Which of the Following Statements Is True? Consider Options Written

question 10

Multiple Choice

Which of the following statements is true? Consider options written on a non-dividend-paying stock.

• A) All European and American options have positive gamma.
• B) European options and American calls have positive gamma, but American puts may have negative gamma.
• C) European options have positive gamma, but American options may have positive or negative gamma.
• D) Gamma may be positive or negative for both American and European options.

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Definitions:

Output Torque

The rotational force generated by an engine or motor that is available at the output shaft.

Planetary Gearset

A compact and efficient gear system that consists of one central gear (sun gear), several outer gears (planet gears), and a ring gear, used in various automatic transmissions and mechanical devices.

High Resistances

Refers to elevated levels of electrical resistance within circuits, which can lead to reduced current flow, inefficiencies, and potential overheating.

Voltage Drop Testing

A diagnostic method used to locate resistance or issues in an electrical circuit by measuring the voltage loss between two points under a load condition.