British Imports Has a Stock Price of $18

question 41

Multiple Choice

British Imports has a stock price of $18.70 a share.The $20 put is priced at $1.65.The intrinsic value of the put is ____ and the time value is _____.

• A)$0;$1.65
• B)$1.65;$0
• C)$1.30;$.35
• D)$.35;$1.30
• E)$2.95;-$1.65

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Definitions:

Binomial Probability

The probability of obtaining a fixed number of successful outcomes in a fixed number of trials in a binomial experiment.

Odds

The ratio of the probability of an event happening to the probability of it not happening; in gambling, it represents the amount won relative to the stake.

Unfriended

The act of removing someone from one's social networking friends list.

Probability

The quantification of the chance of an event happening, represented as a number from 0 to 1, with 0 meaning the event is impossible and 1 meaning the event is certain.