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Suppose the Price of E-Books Is Initially $20 but Decreases

question 54

Multiple Choice

Suppose the price of e-books is initially $20 but decreases to $15.The absolute value of the percentage change in price (by the midpoint method) is approximately _____%.


Definitions:

Put Option

A financial contract allowing the holder to sell a stock, bond, commodity, or other asset at a specified price within a certain period.

Writer

In finance, it refers to the seller of an option contract, who is obligated to buy or sell the underlying asset if the option is exercised.

Premium

The amount by which the price of a security or insurance policy exceeds its par or face value or the cost of acquiring an option or futures contract.

Strike Price

The predetermined price at which an option can be exercised, either to buy or sell the underlying asset.

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