Which One of the Following Situations Will Produce the Highest

question 9

Multiple Choice

Which one of the following situations will produce the highest put price, all else constant? Assume the options are all in the money.

• A)$50 stock price; 60 days to option expiration
• B)$50 stock price; 90 days to option expiration
• C)$55 stock price; 60 days to option expiration
• D)$55 stock price; 90 days to option expiration
• E)Insufficient information is provided to answer this question.

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Definitions:

Promoters

Individuals or companies that are involved in the planning and establishment of a company, or those who actively support or recommend something.

Stock Dividend

A distribution of additional shares to shareholders at no extra cost, based on the number of shares they already own.

Corporation's Assets

Resources owned by a corporation that have economic value and can contribute to the company's future income and benefits.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting liabilities, representing ownership interest held by shareholders.