Examlex

Solved

Rex Bought a Put on Alpha Stock with a Strike

question 6

Multiple Choice

Rex bought a put on Alpha stock with a strike price of $35 when the market price of Alpha stock was $33 a share. Alpha is currently selling at $34 a share. Which of the following statements are true given this information?
I. Rex's option is worth at least $100 today.
II. Rex's option is worthless today.
III. Rex's option has more value today than when he bought it.
IV. Rex's option has less value today than when he bought it.


Definitions:

Responsibility

The state or fact of being accountable for something, or having a duty to deal with something.

Consistency

The quality of always acting or behaving in the same way, showing reliability and homogeneity in actions or beliefs.

Evocative Person-Environment Transaction

The process by which a people may change situations they encounter through behaviors that express their personality.

Active Person-Environmental Transaction

The dynamic interaction between an individual and their environment, where both influence and are influenced by each other.

Related Questions