The Value of a Put Option Is Positively Related to the

question 75

Multiple Choice

The value of a put option is positively related to the

• A)exercise price, time to expiration, and volatility of the underlying stock price.
• B)time to expiration, volatility of the underlying stock price, and risk-free rate.
• C)exercise price, time to expiration, and risk-free rate.
• D)risk-free rate.

---

Definitions:

Gain Yards

In American football, the action or process of advancing the football towards the opponent's end zone, typically measured in yards.

Pure Strategy Equilibria

A situation in a game where players choose a single strategy and their choices result in an equilibrium.

Mixed Strategy

A decision-making strategy in game theory where a player chooses between possible moves according to a set of probabilities.

Payoff

The gain or benefit derived from an investment or action.