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:

Isocost

A line representing all combinations of a firm’s inputs that have the same total cost.

Total Cost

The total of constant and fluctuating expenses involved in the creation of products or services.

Isocost Line

a graphical representation in economics showing all possible combinations of inputs that cost the same amount for a firm.

Price Of Capital

The cost of utilizing capital or funds in the production of goods or services, often expressed as an interest rate.