Other Things Equal, the Price of a Stock Put Option

question 85

Multiple Choice

Other things equal, the price of a stock put option is negatively correlated with which of the following factors?

• A) The stock price
• B) The time to expiration
• C) The stock volatility
• D) The exercise price
• E) The time to expiration, stock volatility, and exercise price

---

Definitions:

Activity Level

An indicator of the volume of business activity or operations in a specific period, often used in costing and budgeting to measure performance.

Fixed Costs

Costs that remain constant in total regardless of changes in the level of activity within a relevant range.

Static Budget

A budget that is based on fixed assumptions and does not change with variations in business activity levels.

Master Budget

A comprehensive financial planning document incorporating all of an organization's financial plans, including sales, production, and cash budgets.