What Is Meant by Consumer Surplus

question 4

Multiple Choice

What is meant by consumer surplus?

• A) It is the net gain that buyers obtain from purchasing a good.
• B) It is the area enclosed by the demand and supply curves.
• C) It is the difference between the good's price and its cost per unit.
• D) It is the maximum monetary amount that a person would be willing to pay for a good.
• E) It is the total satisfaction from the consumption of a good.

Grasp the concepts of hedge ratios and deltas in option trading.

Understand the impact of stock and option correlation on hedge ratios in the binomial option pricing model.

Recognize the strategies for using options for portfolio insurance and maximizing returns.

Calculate option values using the Black-Scholes model and understand the factors influencing these values.

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