A 3-Month Put Has a Strike Price of $47

question 79

Multiple Choice

A 3-month put has a strike price of $47.50 and an option premium of $1.40.The underlying stock is selling for $46.70 per share.What is the time value of the put?

• A)$0.00
• B)$0.60
• C)$0.70
• D)$1.20
• E)$1.40

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Definitions:

Set Point

The genetically influenced weight range for an individual; it is maintained by biological mechanisms that regulate food intake, fat reserves, and metabolism.

Genetically Influenced

Traits or characteristics that are shaped in part by an individual's genetic makeup.

Metabolic Rate

The rate at which the body uses energy to maintain basic life functions such as breathing, circulation, and cell production.

Set Point Theory

A theory suggesting that an individual's body weight is maintained around a biologically predetermined point, making significant long-term weight change difficult.