A Put Option on the ABC Stock, with an Exercise

question 49

Multiple Choice

A put option on the ABC stock, with an exercise price of $60, is selling for $4.00 and the stock price is also $60. The put option has a delta of 0.5. If within a short period of time the stock price increases to $61, what would be the change in the price of the put option?

• A) increases by $0.50
• B) decreases by $0.50
• C) increases by $1.00
• D) decreases by $1.00

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Definitions:

Calibration

The process of adjusting and standardizing the accuracy of a device by comparing it with universally accepted standards.

Spirometer

A medical device used to measure the air capacity of the lungs to assist in diagnosing and monitoring respiratory conditions.

Standardized Measuring Instrument

Tools or devices used to collect data in a uniform manner to ensure consistency and reliability in research or assessments.

Peak Flow Zone

Refers to the optimal range of peak expiratory flow rates indicating well-controlled asthma or lung function.