A Stock Is Selling for $45

question 19

Multiple Choice

A stock is selling for $45.75, with a put option available at a $50 strike that has a premium of $7.50. What is the intrinsic value of the put?

• A)$4.25
• B)$1.25
• C)$3.25
• D)$5.25
• E)$7.50

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Definitions:

Independent Variables

Variables in a statistical model that are manipulated or chosen by the researcher to determine their effect on the dependent variable.

Unit Price

The cost per single unit of measure, allowing for comparison of costs among different sizes or quantities of the item.

SSR

Stands for sum of squares due to regression, indicating the variation explained by the independent variables in a regression model.

Test Statistic

A statistic whose value helps determine whether a null hypothesis should be rejected.