If You Exercise a Put Option Prior to Expiration You

question 365

Multiple Choice

If you exercise a put option prior to expiration you ______________.

• A) Sell the asset underlying the option contract at the option strike price.
• B) Must have been the "writer" of the option when it was created.
• C) Will receive less than you would if you let the option run to maturity.
• D) Have behaved in a rational manner if the market price exceeds the strike price.
• E) Must own a European option.

---

Definitions:

Vivid Stimuli

Stimuli that are perceived as highly distinct, clear, or emotionally engaging, often capturing attention and being easily remembered.

Concrete

Pertaining to or characterized by material objects, not abstract; tangible, real, or specific.

Bookkeeping

The systematic recording, organizing, and maintaining of financial transactions for an individual or an organization.

Schema Change

The modification or updating of cognitive frameworks or mental structures that are used to organize information, usually in response to new information or experiences.