Which of the Following Statements Is True? Consider Options Written

question 7

Multiple Choice

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

• A) All American options have negative theta and positive gamma.
• B) American calls have negative theta and positive gamma, but American puts may sometimes have positive theta and negative gamma.
• C) All American options have negative theta and all American calls have positive gamma, but American puts may sometimes have negative gamma.
• D) All American options have positive gamma and American calls have negative theta, but American puts may sometimes have positive theta.

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Definitions:

Direct Labor Costs

Expenses related to employees who directly produce a product or provide a service, such as wages for assembly line workers.

Work in Process Inventory

Inventory that includes materials and labor that are currently in the production process but not yet completed.

Materials Price Variance

The difference between the actual cost of direct materials and the standard cost, reflecting how effectively a company is purchasing materials.

Materials Quantity Variance

A financial metric used in cost accounting to measure the difference between the actual quantity of materials used in production and the expected quantity.