Tele-Tech Com Announces a Major Expansion into Internet Services

question 23

Multiple Choice

Tele-Tech Com announces a major expansion into Internet services.This announcement causes the price of Tele-Tech Com share to increase,but also causes an increase in price volatility of the share. Which of the following correctly identifies the impact of these changes on the put option of Tele-Tech Com?

• A)Both changes cause the price of the put option to decrease.
• B)Both changes cause the price of the put option to increase.
• C)The greater uncertainty will cause the price of the put option to decrease.The higher price of the share will cause the price of the put option to increase.
• D)The greater uncertainty will cause the price of the put option to increase.The higher price of the share will cause the price of the put option to decrease.
• E)The greater uncertainty has no direct effect on the price of the put option.The higher price of the share will cause the price of the put option to decrease.

---

Definitions:

Dosage

The size or frequency of a dose of a medicine or drug that is required to achieve its desired effect.

Stratifying

The process of dividing a population or sample into subgroups before sampling or analysis to ensure representation across key characteristics.

Blocking

In experimental design, the practice of arranging subjects into groups based on certain variables to reduce variability in the experiment.

Asian Longhorned Beetle

An invasive species of beetle known for damaging trees by burrowing through their trunks and branches.