Calculate the Value of a Short Put If the Exercise

question 7

Multiple Choice

Calculate the value of a short put if the exercise price is $10.00,the premium is $1.50 and the spot price is $8.00,given V = P - max(X-S,0) .

• A) -$1.50
• B) -$0.50
• C) $0.00
• D) $0.50

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Definitions:

Continuity

In developmental psychology, the idea that development involves gradual, cumulative change, contrasting with theories that emphasize distinct stages.

Theorists

Individuals who formulate theories across various fields, offering explanations or models to describe phenomena within specific contexts.

Cognitive Development

The process of growth and change in intellectual/mental abilities such as thinking, reasoning, and understanding through childhood and adolescence into adulthood.

Concrete Operational

A stage in Piaget’s theory of cognitive development where children develop logical thinking skills but still struggle with abstract concepts.