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    Exam 21: Option Valuation
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    Consider the Following Equation
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Consider the Following Equation

Question 12

Question 12

Multiple Choice

Consider the following equation: Consider the following equation:   The term   Is A)  always equal to zero since b<sub>B</sub> = 0. B)  always positive since B is always positive. C)  could be positive or negative depending on whether the option in question is a put or a call. D)  always negative since B is always negative.
The term Consider the following equation:   The term   Is A)  always equal to zero since b<sub>B</sub> = 0. B)  always positive since B is always positive. C)  could be positive or negative depending on whether the option in question is a put or a call. D)  always negative since B is always negative.
Is


A) always equal to zero since bB = 0.
B) always positive since B is always positive.
C) could be positive or negative depending on whether the option in question is a put or a call.
D) always negative since B is always negative.

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