Which of the Following Is an Example of a Put

question 45

Multiple Choice

Which of the following is an example of a put option which is out of the money?

• A) The option to sell at $11, the stock is worth $12.
• B) The option to buy at $13, the stock is worth $12.
• C) The option to buy at $12, the stock is worth $12.
• D) The option to sell at $13, the stock is worth $12.
• E) The option to buy at $11, the stock is worth $12.

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Definitions:

Voidable Contract

A legal agreement that is valid and enforceable on its face, but can be declared void by one or more of the parties for certain legal reasons.

Contract Formation

The process by which parties' agreement reaches the point where a legally binding contract is established.

Elements Necessary

Fundamental components or conditions required for a legal claim, contract, or other judicial act to be valid or enforceable.

Hula Hoop

A toy hoop that is twirled around the waist, limbs, or neck, popularized in the 1950s.