We Have a Stock Selling for $90

question 11

Multiple Choice

We have a stock selling for $90.00. There is a put option for this stock with a strike price of $85 and an option price of $1.20:

• A) the intrinsic value of this option is $0.00 and the time value of the option is $1.20.
• B) the intrinsic value of this option is $90.00 and the time value of the option is $1.20.
• C) the intrinsic value of this option is -$5.00 and the time value of the option is $1.20.
• D) you cannot determine the intrinsic value or time value of the option since the strike price is less than the underlying asset price.

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Definitions:

Frederick Reichheld

A business strategist best known for his work on customer loyalty and the development of the Net Promoter Score (NPS).

Loyal Customers

Consumers who repeatedly buy products or services from the same brand instead of turning to competitors.

Touch Point Data

Information collected from various customer interactions with a brand, product, or service, used for insightful analysis.

Correlate

To correlate is to establish a relationship or connection between two or more variables, indicating that when one variable changes, there is a predictable change in the other.