Consider a Stock That Is Currently Trading at $20

question 49

Multiple Choice

Consider a stock that is currently trading at $20. Calculate the intrinsic value for a put option that has an exercise price of $35.

• A) $15
• B) $55
• C) $35
• D) -$15
• E) $0

---

Definitions:

Dividends Declared

The amount of earnings a company decides to distribute to its shareholders as measured at a specific point in time.

Retained Earnings

The portion of net income that is held back by a company to be reinvested in its operations or to pay down debt, rather than being distributed to shareholders as dividends.

Business Managers

Individuals responsible for overseeing the operational, financial, and strategic management of a company or a specific department.

Operating Activity

Financial activities directly related to the core business operations, including cash flows from selling goods and services.