Multiple Choice
Option prices are homogeneous of degree one in stock price and strike price. What does this imply?
A) That if you double the stock price and the strike price the option price will remain unchanged.
B) That if you double the stock price the option price will double.
C) That if you double the stock price and halve the strike price the option price will double
D) That if you double the stock price and strike price the option price will double.
Correct Answer:
Verified
Correct Answer:
Verified
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