The ____ the Existing Spot Price Relative to the Strike

question 9

Multiple Choice

The ____ the existing spot price relative to the strike price, the ____ valuable a put option will be.

• A) higher; less
• B) higher; more
• C) lower; less
• D) lower; more

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Definitions:

Commercial Paper

A short-term, unsecured debt instrument issued by companies to finance their immediate operational needs.

Short-term Borrowing

Loans or debt obligations that are expected to be paid back within a short period, typically less than one year, often used for operational expenses.

Carrying Costs

Expenses associated with holding or storing inventory over a period of time, including insurance, storage, and depreciation.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed in the business within one year or within the normal operating cycle.