Lindsay Purchased a Raffle Ticket for $5

question 21

Multiple Choice

Lindsay purchased a raffle ticket for $5.Just before the grand prize drawing two people tried to buy her ticket.The first person offered $30,and another offered $65.What is Lindsay's opportunity cost of keeping the raffle ticket?

• A) $60
• B) $65
• C) $90
• D) $95

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Definitions:

Exercise Price

Exercise price is the specified price at which the holder of an option can buy (call) or sell (put) the underlying security or commodity.

Volatility

A statistical measure of the dispersion of returns for a given security or market index.

Delta

A measure in options trading that indicates how the price of an option is expected to change relative to a one-unit change in the price of the underlying asset.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a fixed period of time.