Which One of the Following Is the Upper Price Bound

question 48

Multiple Choice

Which one of the following is the upper price bound for the intrinsic value of a European put option on a stock?

• A) 0
• B) strike price
• C) stock price
• D) Max (S - K, 0)
• E) Max (K - S, 0)

---

Definitions:

Line Extension

The use of the same brand name within the same product line and represents an increase in a product line’s depth.

Convenience Goods

Products that are inexpensive and readily available, making them easy for consumers to buy frequently with minimal effort.

Consumer Staples

Essential products that consumers continue to demand regardless of economic conditions, such as food, beverages, and household goods.

Specialty Goods

High-value products that are unique or considered luxury items, often requiring a specific purchasing effort by consumers.