A Stock Is Trading at $20 $- 0.50$ A Decrease of 10 Basis Points in the Interest Rate

question 26

Multiple Choice

A stock is trading at $20.A one-month put with a strike of 19 is valued at $0.360 and has a rho of $- 0.50$ .A decrease of 10 basis points in the interest rate changes the put value by

• A) \(- 0.005\)
• )
• B) \(+ 0.005\)
• )
• C) \(- 0.05\)
• D) \(+ 0.0005\)
• )

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Definitions:

Pert Chart

A project management tool that outlines the tasks involved in a project, their sequence, and the time required for each, facilitating the identification of the critical path for project completion.

Market Development

The process of expanding into new markets or segments to increase the reach and sales potential of a company's products or services.

Product Development

The process of creating or improving a product or service, from initial concept through market release and beyond.

Diversification

A risk management strategy that involves adding variety to a portfolio to spread out exposure and reduce the impact of volatility.