The Current Market Price of a Share of a Stock

question 31

Multiple Choice

The current market price of a share of a stock is $80. If a put option on this stock has a strike price of $75, the put

• A) is in the money.
• B) is at the money.
• C) sells for a lower price than if the market price of the stock is $75.
• D) is in the money and sells for a lower price than if the market price of the stock is $75.
• E) is out of the money and sells for a lower price than if the market price of the stock is $75.

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Definitions:

Wage Rate

The standard amount of pay given for work performed, typically expressed in terms of pay per hour or pay per unit of work done.

Productivity

Productivity measures the efficiency of production in terms of the amount of output produced per unit of input used.

Derived Demand

The demand for a good or service that arises from the demand for another good or service. For example, demand for steel is derived from the demand for cars.

MPP

"MPP" is typically understood as "Marginal Physical Product," which refers to the additional output resulting from the use of one more unit of a variable input, holding all other inputs constant.