Three Months Ago You Bought a Put Option with an Exercise

question 78

Multiple Choice

Three months ago you bought a put option with an exercise price of $100.What is the value of this option at expiration if the stock price is $110?

• A) $10
• B) −$110
• C) $0
• D) −$10

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Definitions:

Upsloping Line

A line on a graph that shows an increase in the value of a variable on the vertical axis as the value of a variable on the horizontal axis increases, typically seen in supply curves.

Independent Variable

A variable in an experiment or model that is manipulated or changed to observe its effect on a dependent variable.

Dependent Variable

The variable in an experiment or study that is expected to change in response to changes in the independent variable.

Horizontal Axis

In a graph or chart, the x-axis, typically representing time or some independent variable.