Question

what does rho not (rho 0) indicates in this formula or is it a constant value

Answer 1

Answer:

Rho is the rate at which the price of a derivative changes relative to a change in the risk-free rate of interest. ...

For example, if an option or options portfolio has a rho of 1.0, then for every 1 percentage-point increase in interest rates, the value of the option (or portfolio) increases 1 percent