Define the Term Put Option

question 49

Essay

Define the term put option.

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Definitions:

Interest Rates

The price, expressed as a percentage of the principal, that a lender demands from a borrower for the borrowing of assets.

Frederick Macaulay

An economist known for pioneering the concept of bond duration, which measures the sensitivity of a bond's price to changes in interest rates.

Duration Concept

A measure of the sensitivity of a bond's price to changes in interest rates, gauging how much a bond's price will change for a given fluctuation in rates.

Price Volatility

The degree of variation in the price of a financial instrument, commodity, or market index over time, often measured by the standard deviation of returns.