A Stock Is Currently Priced at $25 a Share While

question 73

Multiple Choice

A stock is currently priced at $25 a share while the $30 put option is priced at $4.14.The put option delta is -0.20.What is the approximate put price if the stock increases in value to $28?

• A) $3.94
• B) $4.97
• C) $5.08
• D) $5.27
• E) $5.50

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Definitions:

Goods Purchased

Items bought by a company for resale or use in production, contributing to inventory.

Variable Selling Expenses

Costs that fluctuate in direct proportion to changes in sales volume, such as commissions and shipping charges.

Administrative Expenses

Costs related to the general operation of a business, such as salaries of executive personnel, accounting, and human resources.

Cash Disbursements

Represents the money flowing out of a company to cover expenses, including payments to suppliers and employees.