The Following Quotes Were Observed for Options on a Given

question 51

Multiple Choice

The following quotes were observed for options on a given stock on November 1 of a given year. These are American calls except where indicated. Use the information to answer questions 7 through 20.

The stock price was 113.25. The risk-free rates were 7.30 percent (November) , 7.50 percent (December) and 7.62 percent (January) . The times to expiration were 0.0384 (November) , 0.1342 (December) , and 0.211 (January) . Assume no dividends unless indicated.
-What is the intrinsic value of the December 115 put?

• A)1.75
• B)0.00
• C)3.90
• D)3.00
• E)none of the above

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Definitions:

Secondary Reinforcement

A process where a stimulus reinforces a behavior through its association with a primary reinforcer (e.g., praise or social approval that becomes reinforcing through its association with more direct rewards).

Successive Approximations

A method in behaviorism used to train a new behavior by rewarding actions that are progressively closer to the desired behavior.

Hippocampus

A region of the brain involved in memory formation, organization, and storage, as well as spatial navigation and emotional regulation.

Novel Inputs

New, unfamiliar, or unique data or stimuli that are introduced to a system or individual for processing.