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

question 49

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

• A)in-the-money.
• B)out-of-the-money.
• C)a LEAPS option.
• D)out-of-the-money and a LEAPS option.

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Definitions:

GDP Deflator

A gauge for pricing of all new, native-produced, conclusive goods and services within an economy, applied to revise nominal GDP in order to compute real GDP.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by a country in a specific period in real terms.

Percentage Change

A mathematical calculation that determines the degree of change over time as a proportion of the original value, often used to measure growth or decline in economic data.

Real GDP

The calculation of a nation's economic production accounting for variations in prices, representing the actual value of all goods and services generated.