European vanilla option typically have negative delta

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Reference no: EM131856779

1. When valuing European Vanilla Options in the Black-Scholes-Merton Model, there is one source of uncertainty. What is this uncertainty?

2. Why does a short call position in a European vanilla option typically have negative delta (Δ)?

3. In calculating the net present value of a proposed project, the cash flows of the project should include

a) amortization of goodwill

b) interest expenses paid to bondholders

c) extra working capital required by the project

d) dividends paid to shareholders

Reference no: EM131856779

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European vanilla option typically have negative delta : Why does a short call position in a European vanilla option typically have negative delta (?)?

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