A Stock Is Currently Priced at $22 a Share While

question 30

Multiple Choice

A stock is currently priced at $22 a share while the $26 put option is priced at $5.22. The put option delta is −.25. What is the approximate put price if the stock increases in value to $25?

• A)$3.76
• B)$4.47
• C)$5.08
• D)$5.27
• E)$5.50

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Definitions:

Recover Cost

entails obtaining reimbursement for funds that have been expended for a specific purpose, often through legal or contractual means.

Express Terms

Clearly stated conditions and stipulations in a contract, either orally or in writing, that outline the specific obligations of the parties involved.

Course of Performance

A sequence of conduct between parties to a contract that is relevant to determining their rights and duties under that agreement.

Usage of Trade

Established practices or methods commonly accepted and widely adopted in a particular industry or commerce.