Jimmy Campbell Is Looking to Buy Put Options on Hawkwood

question 14

Multiple Choice

Jimmy Campbell is looking to buy put options on Hawkwood Corporation.Currently Hawkwood Corp.stock is trading at $40 per share.The put options that he is considering buying have a strike price of $45.These put options are

• A) in-the-money
• B) American options
• C) out-of-the money
• D) European options

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Definitions:

One-tail Area

Refers to the area under the probability distribution curve to either the left or right of a specified value, used in hypothesis testing to assess one-sided significance.

Equal-variances Test

A statistical procedure used to assess whether the variances of two populations are equal, as assumed by certain parametric tests.

Unequal Variances

A situation in statistical analyses where two or more groups have significantly different variances, impacting the assumptions of certain tests.

Normally Distributed

A description of dataset that follows a normal distribution, with most observations clustering around the mean and symmetrical tails.