Suppose That a Stock Sells at a Price of $50

question 74

Multiple Choice

Suppose that a stock sells at a price of $50 on the expiration date. Compute the price of a put option if the option strike price is $80.

• A) $20
• B) $30
• C) $40
• D) $50

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Definitions:

Classical Conditioning

A pairing process in learning where two stimuli are continuously linked; initially, the response is elicited by the second stimulus but over time, the first stimulus can elicit this response by itself.

Beeping Sound

A type of auditory signal or notification often used by devices to attract attention or indicate an alert.

Electric Shock

A sudden discharge of electricity through a part of the body causing injury or neurological disturbance.

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response, typically as a result of the conditioned stimulus being presented without reinforcement.