Financial Risk Manager Part 1

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Answer: True

**Correct answer: A (True).** Correlation matters because both basket and rainbow options depend on the joint behavior of multiple underlying assets. The relationship between the assets affects the distribution of the payoff and therefore the option value.

Author: Manit Arora

Quick Answer

Answer-first summary for fast verification

Answer: True

**Correct answer: A (True).** Correlation matters because both basket and rainbow options depend on the joint behavior of multiple underlying assets. The relationship between the assets affects the distribution of the payoff and therefore the option value.

Author: Manit Arora

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Q-21.3(c). True or false: Correlation is a key pricing parameter for both rainbow and basket options

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MManit

Last updated: April 18, 2026 at 11:32

0

A

True

B

False

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