A Stock Is Selling for $45

question 51

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 speculative premium of the put?

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

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Definitions:

Consensus

General agreement among a group or the process of reaching such agreement, typically through discussion and negotiation.

Distinctiveness

The quality of being noticeably different and unique from others, often used to describe features, identities, or products that stand out.

Consistency

The quality of maintaining uniformity, coherence, and reliability in actions, values, methods, measures, or principles over time.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors in judging others' behavior.