The 4750 Put on a Stock Is Trading at 1

question 78

Multiple Choice

The 47.50 put on a stock is trading at 1.32 bid and 1.37 ask. To buy one option contract, you must pay ________ at the time the contract is purchased.

• A)$1.32
• B)$132.00
• C)$137.00
• D)$4,613.00
• E)$4,882.00

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Definitions:

Monthly Interest Rate

The percentage of interest charged or earned on a principal amount on a monthly basis.

Variable Cost

A cost that changes in proportion to changes in the level of output or activity.

Accounts Receivable Balance

The accounts receivable balance represents the total amount of money owed to a company by its customers for goods or services rendered but not yet paid for.

Inventory Period

The time it takes to acquire and sell inventory.