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

---

Definitions:

Trade

The exchange of goods or services between entities or individuals.

Premack Principle

The Premack Principle is a psychological principle which suggests that more probable behaviors will reinforce less probable behaviors, meaning that if a person wants to perform a specific activity, they will perform a less desirable activity to get to it.

Decrease

A reduction in quantity, size, or intensity of an object or an action.

Barking

The sound a dog makes, often in response to excitement, threat, or communication needs.