On the Expiration Date for a Put Option with Strike

question 36

Multiple Choice

On the expiration date for a put option with strike price of $10.00,premium $1.50 and the current spot price of $8.00,the holder will:

• A) buy the shares in the market place.
• B) let the option contract lapse.
• C) exercise the option.
• D) make a profit of $1.50

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Definitions:

Assimilation

A cognitive process in developmental psychology where individuals integrate new information into existing schemas or frameworks.

Equilibration

A mechanism that Piaget proposed to explain how children shift from one stage of thought to the next. The shift occurs as children experience cognitive conflict, or disequilibrium, in trying to understand the world. Eventually, they resolve the conflict and reach a balance, or equilibrium, of thought.

Cognitive Observations

The process of monitoring and analyzing thought processes, including memory, perception, and problem-solving.

University Laboratory

A dedicated space within a university where experimental research, teaching, or learning in a specific field of study is conducted.