In June 2017,an Investor Buys a Put Option on Genentech

question 36

Multiple Choice

In June 2017,an investor buys a put option on Genentech stock with an exercise price of $75 and expiring in January 2019.If the stock price in July 2017 is $80,then this option is:
I.in-the-money
II.out-of-the-money
III.a LEAPS option

• A)I only
• B)II only
• C)III only
• D)II and III only

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Definitions:

Sublease

A legal agreement where a tenant rents out a property they are leasing to another party.

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A phrase indicating the total ownership or complete control of property or an asset.

Freehold Estate

An interest in land or real property that is of uncertain duration, including estates like fee simple and life estates, which can be inherited.

Real Property

Land and any permanent structures on it, including buildings and natural resources, recognized as property that can be owned and transferred.