The Premium on an Existing Put Option Should ____ When

question 6

Multiple Choice

The premium on an existing put option should ____ when the underlying stock price increases.

• A) be negative
• B) decline
• C) increase
• D) be unaffected
• E) A and B

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Definitions:

Spending Variance

A financial metric that compares the actual amount spent to the budgeted or planned amount in a certain period.

Press Runs

A term often used in printing or manufacturing indicating the number of times a machine produces a particular set of print materials in a single operation.

Book Set-Ups

The initial configuration and adjustments made in accounting records or financial statements preparation.

Wages And Salaries

Compensation paid to employees for their services, with wages often calculated on an hourly basis and salaries on an annual basis.