Under What Circumstance Will the Buyer of a Put Option

question 38

Multiple Choice

Under what circumstance will the buyer of a put option be asked to perform her obligation?

• A) When the stock price has declined below the strike price.
• B) When the stock price has increased above the strike price.
• C) The put buyer has an equal obligation regardless of the relationship between stock and strike prices.
• D) The put buyer has no obligation whatsoever.

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Definitions:

External Stimuli

These are factors or events in the external environment that can provoke a response or reaction from individuals or systems.

Buying Center

A Buying Center consists of all the individuals and units that participate in the business decision-making process for purchasing products or services.

B₂B Customers

Businesses that purchase goods or services from other businesses for use in their operations or reselling.

Types

Varieties or categories of something, classified based on common characteristics or attributes.