The elasticity of a stock put option is always
A) positive.
B) smaller than one.
C) negative.
D) infinite.

Question

Quizplus · Accepted Answer

The elasticity of a stock put option is negative because the value of the put option increases as the stock price decreases, which is an inverse relationship. Elasticity measures the responsiveness of one variable to changes in another variable, and in the case of put options, the value of the option moves inversely to the price of the underlying stock.

The Elasticity of a Stock Put Option Is Always