Other Things Equal, the Price of a Stock Put Option

question 87

Multiple Choice

Other things equal, the price of a stock put option is positively correlated with which of the following factors?

• A) The stock price
• B) The time to expiration
• C) The stock volatility
• D) The exercise price
• E) The time to expiration, stock volatility, and exercise price

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Definitions:

Rivals

Competitors within a market, vying for the same customers or resources in an effort to achieve economic or strategic advantages.

Market System

(1) An economic system in which individuals own most economic resources and in which markets and prices serve as the dominant coordinating mechanism used to allocate those resources; capitalism. Compare with command system. (2) All the product and resource markets of a market economy and the relationships among them.

Incentives

Rewards or penalties designed to influence the actions or behaviors of individuals or entities in desired ways.

Internal Efficiency

The effective allocation and use of resources within an organization or system, leading to the achievement of its objectives without waste.