For a $1.50/£ call option with an initial premium of $0.033/£ and a lambda of 0.4, after an increase in annual volatility of 1 percent point - for example from 10% to 11% - the new optiom premium would be:

A) $0.036/£.
B) $0.037/£.
C) $0.004/£.
D) $1.54/£.

Answer: B

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Which of the following is true regarding the relationship between AOQ and the true population percent defective?

A) AOQ is greater than the true percent defective. B) AOQ is the same as the true percent defective. C) AOQ is less than the true percent defective. D) There is no relationship between AOQ and the true percent defective. E) The relationship between these two cannot be determined.

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