Option Payoffs: You Own a Put Option on ABC

question 105

Multiple Choice

Option payoffs: You own a put option on ABC. Co. stock with a strike price of $40. The current stock price is $40. You will benefit if

• A) the stock price goes up.
• B) the stock price goes down.
• C) the stock price stays the same.
• D) It doesn't matter; you are indifferent to changes in the stock price.

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Definitions:

Eardrum

A delicate film that divides the outer from the middle ear, moving in reaction to sound waves.

Sound Waves

Sonic oscillations transmitted through the air or other mediums, detectable upon reaching the ears of people or animals.

Carotid Canal

A passage in the temporal bone of the skull through which the internal carotid artery enters the cranial cavity to supply blood to the brain.

Internal Carotid Artery

A major artery located in the head and neck that supplies blood to the brain, eyes, eyelids, forehead, nose, and internal ear.