Consider a Stock That Is Trading at $50 $- 0.40$ The Stock Volatility Is 20%,the Risk-Free Rate Is 4%,and the Put

question 1

Multiple Choice

Consider a stock that is trading at $50.A six-month at-the-money put option on the stock has a price of 2.21 and a delta of $- 0.40$ .The stock volatility is 20%,the risk-free rate is 4%,and the beta of the stock is 1.1.What is the beta of the put?

• A) \(- 0.44\)
• B) \(- 1.1\)
• C) \(+ 1.1\)
• D) \(- 9.95\)

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Definitions:

Market Development

A growth strategy where a business seeks to sell its existing products into new markets to increase its customer base.

Product Development

The process of bringing a new product or service from concept to market, including design, creation, and launch phases.

Market Penetration

The extent to which a product or service is recognized and used by customers in a particular market.

Diversification

A strategy in finance and business development that involves entering into a variety of markets or developing a range of products to minimize risks.