Three Weeks Ago, You Purchased a November 25 Put Option

question 355

Multiple Choice

Three weeks ago, you purchased a November 25 put option on Kepner stock at an option price of $1.20. The market price of the stock three weeks ago was $24.30. Today, the stock is selling at $24.80 a share and the November 25 put is priced at $.60. What is the intrinsic value of your put contract?

• A) -$100
• B) -$20
• C) $0
• D) $20
• E) $60

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Definitions:

Phillipe Charcot

A pivotal figure in 19th-century neurology, often remembered for his work on neurological disorders such as hysteria and multiple sclerosis.

Hermann Helmholtz

A German physicist and physician renowned for his contributions to the understanding of the physiology of vision and audition.

Sperling's Experiments

Psychological experiments conducted by George Sperling that demonstrated the existence of iconic memory, showcasing how people can recall visual information after short exposures.

Ebbinghaus

Refers to Hermann Ebbinghaus, a German psychologist known for his pioneering work on memory and the forgetting curve.