A common finance assumption that is violated when options are included in a stock portfolio is
A) normality of returns
B) constant interest rates
C) constant beta
D) no taxes

Name: A common finance assumption that is violated when options are included in a stock portfolio is A) normality of returns B) constant interest rates C) constant beta D) no taxes
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Question

Quizplus · Accepted Answer

Options can lead to non-normal return distributions due to their asymmetric payoff structures, thus violating the assumption of normality of returns.

A Common Finance Assumption That Is Violated When Options Are