You Own a Put Option on Phosfranc Inc

question 47

Multiple Choice

You own a put option on Phosfranc Inc. stock with a strike price of $50. The current stock price is $50. Which of the following would you prefer?

• A) The stock price goes up
• B) The stock price goes down
• C) The stock price stays the same
• D) You don't care what happens to the stock price.

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Definitions:

Feasible Terms

Conditions or criteria that can be realistically achieved or met in a particular context or agreement.

Production Possibilities

The different combinations of goods and services that a society can produce given its available resources and technology.

Comparative Advantage

The ability of an individual, firm, or country to produce a certain good or service at a lower opportunity cost than competitors.

International Specialization

The economic strategy where countries focus on the production and export of goods and services for which they have a comparative advantage.