Tele-Tech Com Has Announced a Large Loss in Their On-Line

question 3

Multiple Choice

Tele-Tech Com has announced a large loss in their on-line services division causing the price of Tele-Tech Com stock to drop but the price volatility of the stock is not expected to drop. Which of the following correctly identifies the impact of these changes on the put option of Tele-Tech Com?

• A) Both changes cause the price of the put option to decrease.
• B) Both changes cause the price of the put option to increase.
• C) The volatility normally will have a positive effect on the price of the put option, but the lower price of the stock will cause the price of the put option to increase.
• D) The volatility normally will have a negative effect on the price of the put option while the lower price of the stock will cause the price of the put option to decrease.
• E) Volatility has no direct effect on the price of the put option while the lower price of the stock will cause the price of the put option to decrease.

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Definitions:

Daughter Cells

The cells that result from the division of a single parent cell during processes like mitosis and meiosis.

Cell Division

The process by which a parent cell divides into two or more daughter cells, crucial for growth, repair, and reproduction in organisms.

Anatomical Direction

Terms used to describe the locations and orientations of structures within the body relative to other structures or locations, such as anterior, posterior, superior, and inferior.

Inferior

Anatomical term meaning below or closer to the feet; also called caudal.