A Speculator May Write a Put Option on Stock with an Exercise

question 44

Multiple Choice

A speculator may write a put option on stock with an exercise price of $15 and earn a $3 premium only if they thought

• A) the stock price would stay above $12.
• B) the stock volatility would increase.
• C) the stock price would fall below $18.
• D) the stock price would stay above $15.
• E) the stock price would rise above $18 or fall below $12.