Which One of the Following Will Decrease the Value of a Put

question 214

Multiple Choice

Which one of the following will decrease the value of a put option?

• A) An increase in the price of the stock
• B) An increase in the strike price
• C) An increase in the standard deviation of the return on the stock
• D) A decrease in the risk-free rate of return
• E) An increase in the time to expiration

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Definitions:

Budget Variance

The difference between what was budgeted or planned in terms of financial performance or cost, and what was actually achieved.

Labor Efficiency Variance

The difference between the actual labor hours used and the standard hours expected for the level of production achieved.

Direct Labor

The cost of workers who are directly involved in the production of goods or the delivery of services.

Standard Cost System

An accounting method that assigns predetermined costs to products and services, which are then compared to actual costs to measure performance.