If a Microsoft January 20 Put Option with a Strike

question 108

Multiple Choice

If a Microsoft January 20 put option with a strike price of $20 were about to expire and the market price of the underlying Microsoft stock was $15.00, the price of the put option would have to be __________ to eliminate arbitrage opportunities.

• A) $1.00
• B) $2.00
• C) $4.00
• D) $5.00

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Definitions:

Compensation System

The overall structure and methodology an organization uses to compensate its employees, including wages, salaries, benefits, and incentives.

Central Tendency

A statistical measure that identifies the center of a data distribution, commonly represented by the mean, median, or mode.

Extreme Values

Data points in a set that significantly deviate from the rest, often used in statistical analyses to identify outliers or anomalies.

Higher Hierarchy

The upper levels within an organizational structure, typically involving roles with greater authority and responsibility.