Which one of the following is the correct formula for approximating the change in an option's value given a small change in the value of the underlying stock?
A) Change in option value Change in stock value/Delta
B) Change in option value Change in stock value/(1 - Delta)
C) Change in option value Change in stock value/(1 + Delta)
D) Change in option value Change in stock value * (1 - Delta)
E) Change in option value Change in stock value * Delta
Correct Answer:
Verified
Q21: The value of an option is equal
Q24: Which one of the following statements related
Q25: Assume the price of the underlying stock
Q26: Which of the following statements are correct?
I.As
Q29: Which of the following statements are correct?
I.Increasing
Q35: Which one of the five factors included
Q38: To compute the value of a put
Q39: The Black-Scholes option pricing model can be
Q40: For the equity of a firm to
Q40: The implied standard deviation used in the
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents