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:

Thanatos

In psychoanalytic theory, it refers to the death drive, which is a concept suggesting humans hold an unconscious wish to die or self-destruct.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification and diagnostic tool for mental disorders used by healthcare professionals.

Altruistic Suicide

A concept by sociologist Émile Durkheim, describing a type of suicide that occurs when individuals sacrifice their life for the perceived benefit of the community.

Clinical Depression

A medical condition characterized by persistent feelings of sadness, hopelessness, and a lack of interest in activities, significantly affecting daily life.