A Put Option Is Currently Selling for $6 with an Exercise

question 48

Multiple Choice

A put option is currently selling for $6 with an exercise price of $50. If the hedge ratio for the put is −0.30, and the stock is currently selling for $46, what is the elasticity of the put?

• A) 2.76
• B) 2.30
• C) −7.67
• D) −2.76
• E) −2.30

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Definitions:

Topical Anesthetic

A medication applied to a specific area of the skin or mucous membranes to numb the area and reduce pain sensation.

General Anesthesia

A medically induced state of unconsciousness with loss of protective reflexes, achieved using gaseous or intravenous drugs, to facilitate major surgical procedures.

Biopsy Specimens

Samples of tissue taken from the body for diagnostic examination.

10% Formalin Solution

A commonly used fixative in histology for preserving biological specimens, consisting of 3.7%-4% formaldehyde in aqueous solution.