You Are Fortunate Enough to Own a Put Option with a Strike

question 20

Multiple Choice

You are fortunate enough to own a put option with a strike price of $40 on the stock of Osmerc, Inc. The current stock price is $3. When the option expires, you expect the stock price to be either $2 or $5. Assume the risk-free rate of interest is zero. What is the value of your option?

• A) $0
• B) $35
• C) $37
• D) $46

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Definitions:

Acetylcholine

A neurotransmitter in the nervous system involved in muscle activation, memory, and learning.

Serotonin

A neurotransmitter associated with mood regulation, digestion, sleep, and other important physiological processes.

Epinephrine

A hormone and neurotransmitter also known as adrenaline; it increases heart rate, muscle strength, blood pressure, and sugar metabolism, and is used in medical scenarios to treat severe allergic reactions.

Neural Pathway

A network of neurons connected by synapses along which electrical impulses travel within the nervous system.