A Stock Currently Sells for $75 Per Share

question 62

Multiple Choice

A stock currently sells for $75 per share.A put option on the stock with an exercise price $70 currently sells for $0.50.The put option is

• A) At-the-money.
• B) In-the-money.
• C) Out-of-the-money.
• D) At breakeven.
• E) None of the above.

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Definitions:

Price Level

The median price level of all goods and services currently offered in the economy.

Previous Year

The 12-month period immediately before the current year, used as a reference point for comparing data or statistical analysis.

Unemployment

The situation where individuals who are willing and able to work are not currently employed.

Inflation

The magnitude of growth in the overall price points for goods and services, weakening the efficacy of spending power.