If the Value of the Underlying Asset Is Well Above

question 38

Multiple Choice

If the value of the underlying asset is well above the exercise price of put option then:

• A) it is likely that the option will be exercised by the buyer.
• B) the exercise price remains constant irrespective of the change in the value of the underlying asset.
• C) the value of the option is directly proportional to the value of the underlying asset.
• D) the seller of the option will most likely make a profit.

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Definitions:

Unequal Distribution of Wealth

A situation where economic resources and wealth are not shared equally among individuals or groups within a society, leading to disparities in living standards and opportunities.

Government Aid

Financial or other assistance provided by a government to individuals, organizations, or other governments in need, which may include subsidies, grants, or disaster relief.

Unemployed

The condition of not having employment while being ready to work.

Mass Unemployment

A significant and widespread condition in which a large percentage of the eligible workforce is unable to find employment.