A 6-Month Put Option on Smith Corp

question 34

Multiple Choice

A 6-month put option on Smith Corp.'s stock has a strike price of $45 and sells in the market for $8.90.Smith's current stock price is $41.What is the option premium?

• A)$4.41
• B)$4.90
• C)$5.39
• D)$5.93
• E)$6.52

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Definitions:

Two-speed

Describes a mechanism, such as a gearbox, with two operating speeds, allowing for a shift in performance or efficiency depending on the requirement.

Kingpin

A critical component in vehicle steering mechanisms or in the coupling between a trailer and a tractor, around which steering or pivoting occurs.

Steering Axles

Axles equipped with mechanisms to alter the direction of a vehicle's wheels, facilitating steering.

Tandem Drive Axles

A pair of drive axles in a vehicle, typically trucks or buses, that work in conjunction to distribute the weight and increase the vehicle's traction.