A speculator may write a put option on stock with an exercise price of $15 and earn a $3 premium only if he 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.
A speculator may write a put option on stock with an exercise price of $15 and earn a $3 premium only if he 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.
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter5: Financial Options
Section: Chapter Questions
Problem 3Q
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Question
A speculator may write a put option on stock with an exercise price of $15 and earn a $3 premium only if he 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.
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