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

---

Definitions:

Eardrum

A slim barrier that divides the external ear from the internal ear, resonating when it encounters sound waves.

Tuning Fork Test

A medical test that uses the vibration of a tuning fork to assess hearing or vibratory sensation.

dB

A unit of measurement used to express the magnitude of sound pressure or electrical power on a logarithmic scale.

Intensity

The degree of strength, force, or concentration applied in a particular action or by a particular phenomenon, such as light, sound, or physical exercise.