A Stock Is Trading at $20 $- 0.50$ a Decrease of 10 Basis Points in the Interest

question 25

Multiple Choice

A stock is trading at $20. A one-month put with a strike of 19 is valued at $0.360 and has a rho of $- 0.50$ . A decrease of 10 basis points in the interest rate changes the put value by

• A) \(- 0.005\) .
• B) \(+ 0.005\) .
• C) \(- 0.05\)
• D) \(+ 0.0005\) .

---

Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.