As an option approaches its expiry date, what happens to the Gamma of an at-the-money (ATM) option? Option: It increases drastically, It gradually decreases to zero, It fluctuates unpredictably, It remains relatively constant

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As an option approaches its expiry date, what happens to the Gamma of an at-the-money (ATM) option?

It increases drastically

It gradually decreases to zero

It fluctuates unpredictably

It remains relatively constant

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Which type of option tends to have the highest percentage change in premium for a significant move in the underlying asset?

"At-the-money (ATM) options"

"Deep in-the-money (ITM) options"

"Slightly out-of-the-money (OTM) options"

"Deep out-of-the-money (OTM) options"

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Which of the following is NOT a characteristic of Gamma?

It tends to be higher for deep out-of-the-money options

It can translate to large directional risk

It is always a positive number for both Calls and Puts

It measures the rate of change of delta

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For which type of option does Delta change most rapidly?

"In-the-money (ITM) options"

"Out-of-the-money (OTM) options"

"At-the-money (ATM) options"

"Deep in-the-money (DITM) options"

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How does the delta of an option behave when implied volatility is high?

The delta becomes less sensitive to changes in the underlying price

A larger range of options around ATM are sensitive to spot price changes

The delta of out-of-the-money options goes to zero

The delta of in-the-money options decreases significantly

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How does the likelihood of an option expiring 'in the money' (ITM) change as the time to expiry increases?

The likelihood of expiring ITM decreases

The likelihood of expiring ITM increases

The likelihood of expiring ITM remains constant

The likelihood of expiring ITM is unpredictable