A Stock Is Currently Priced at $25 a Share While

question 45

Multiple Choice

A stock is currently priced at $25 a share while the $28 put option is priced at $4.39. The put option delta is −.25. What is the approximate put price if the stock increases in value to $26? rev: 04_22_2020_QC_CS-209300

• A)$3.94
• B)$4.14
• C)$4.39
• D)$4.45
• E)$4.50

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Definitions:

Effort

The amount of physical or mental energy expended to achieve a goal.

Incremental Theorist

A person who believes that abilities and intelligence can be developed through effort, practice, and dedication.

Entity Theorist

A person who believes that personal attributes such as intelligence or talent are fixed traits rather than qualities that can be developed.

Traits

Enduring and distinct characteristics of an individual's personality that are consistent across different situations and time.