What Is the Time Premium of a Put with a Strike

question 57

Multiple Choice

What is the time premium of a put with a strike price of $25 when the option price is $2 and the underlying shares sell for $24?

• A) $100.
• B) $400.
• C) $300.
• D) $200.

---

Definitions:

Discrete Approach

A method in mathematics and computing that involves distinct, separate values rather than a continuous set of values.

Integral Approach

A comprehensive method or strategy that considers all factors, components, or aspects as interconnected and essential for achieving a particular goal or understanding a complex issue.

Discrete Approach

A method in accounting or finance that involves separate, individual consideration or analysis of items or periods.

Interim Financial Reports

Financial statements that are issued for a period shorter than the fiscal year, such as quarterly or semi-annually, to provide timely information to investors.