A Stock Currently Sells for $75 Per Share

question 62

Multiple Choice

A stock currently sells for $75 per share.A put option on the stock with an exercise price $70 currently sells for $0.50.The put option is

• A) At-the-money.
• B) In-the-money.
• C) Out-of-the-money.
• D) At breakeven.
• E) None of the above.

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Definitions:

Uniformitarianism

The idea that the natural laws observable around us now are also responsible for events in the past. One part of this view, for example, is the idea that Earth has been shaped by the cumulative action of gradual processes like sediment deposition and erosion.

Natural Laws

Fundamental physical laws that govern the behavior and structure of the natural universe.

Catastrophic Events

Large-scale disasters or significant events with the potential to cause sudden and severe damage to life, property, and the environment.

Natural Theology

The study or theory of knowledge about God and the nature of religious beliefs, based on the observation of the natural world.