The Value of a Put Option Is Positively Related to The

question 75

Multiple Choice

The value of a put option is positively related to the:
I.exercise price;
II.time to expiration;
III.volatility of the underlying stock price;
IV.risk-free rate

• A)I, II, and III only
• B)II, III, and IV only
• C)I, II, and IV only
• D)IV only

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Definitions:

Politically Influential

Describes individuals or groups that hold significant power to affect public policy or government actions.

Import Protections

Measures such as tariffs and quotas that countries implement to protect their domestic industries from foreign competition.

Consumer Surplus

The disparity between the amount consumers are prepared to spend on a product or service and the actual price they pay.

Import-Competing Industries

Sectors within an economy that produce goods or services in direct competition with imports, often affected by trade policies.