A Put Option on a Stock Is Said to Be

question 54

Multiple Choice

A put option on a stock is said to be in the money if

• A)the exercise price is higher than the stock price.
• B)the exercise price is less than the stock price.
• C)the exercise price is equal to the stock price.
• D)the price of the put is higher than the price of the call.

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Definitions:

Sales Revenue

The gross revenue is the entirety of income that comes from selling products or services, prior to deducting any costs.

Total Invested Capital

The sum of a company's equity and debt capital, representing the total amount of capital invested in the business.

Profit Margin

A financial performance ratio that shows the percentage of profit a company makes for each dollar of sales.

Gross Margin

The difference between sales revenue and the cost of goods sold, expressed as a percentage of sales revenue.