If a Microsoft January 20 Put Option with a Strike

question 117

Multiple Choice

If a Microsoft January 20 put option with a strike price of $20 was selling for $5.00 and the market price of the underlying Microsoft stock was $10.00, the price of the put option would be _______________.

• A)in-the-money
• B)out-of-the-money
• C)fairly priced
• D)not enough information to tell

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Definitions:

Normal Rate Of Return

The average or expected return on investment in a normal market condition, often considered the minimum acceptable compensation for investment risk.

Depreciating Capital

Assets that lose value over time due to wear and tear or obsolescence.

Normal Rate Of Return

The average or expected return on an investment or project, often considered the minimum acceptable return given the risk involved.

Rental Car Industry

A sector of the transportation industry that offers vehicles for hire on a short term basis, typically ranging from a few hours to several weeks.