If the Stock Price Decreases, the Price of a Put

question 15

Multiple Choice

If the stock price decreases, the price of a put option on that stock __________, and that of a call option __________.

• A) decreases; increases
• B) decreases; decreases
• C) increases; decreases
• D) increases; increases
• E) does not change; does not change

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Definitions:

Current Ratio

A financial metric that compares a company's current assets to its current liabilities, indicating its ability to meet short-term debt obligations.

Financial Strength

A measure of the stability and health of an organization's finances, often assessed by factors like liquidity, solvency, and profitability.

Days' Sales Outstanding

An indicator of how quickly a company collects cash from accounts receivable after a sale over a given period.

Accounts Payables

Short-term liabilities of a company, representing amounts owed to suppliers or creditors for goods and services received but not yet paid for.