The Current Stock Price Is $50, and a Put Is

question 14

Multiple Choice

The current stock price is $50, and a put is priced at $3.59201. If the stock rises to $50.10, the price of the put will be $3.549152 and if the stock drops to $49.90, the price of the put will be $3.635261. If the stock jumps to $52, what is your best estimate of the new price of the put using the put's delta and gamma?

• A) 2.8095
• B) 2.7309
• C) 2.6523
• D) 4.5317

---

Definitions:

Short-Term

Pertaining to a time frame of typically less than a year, often used to describe loans, investments, and financial obligations.

Dividends

Financial rewards given by a company to its shareholders, predominantly coming from the company's profits.

Stock Valuation

The process of determining the intrinsic value of a company’s shares based on earnings, dividends, and other economic indicators.

Publicly Traded

A designation for companies whose shares are bought and sold on the open market through a stock exchange, allowing for broad public investment.