Rex bought a put on Alpha stock with a strike price of $35 when the market price of Alpha stock was $33 a share. Alpha is currently selling at $34 a share. Which of the following statements are true given this information?
I. Rex's option is worth at least $100 today.
II. Rex's option is worthless today.
III. Rex's option has more value today than when he bought it.
IV. Rex's option has less value today than when he bought it.
A) I and III only
B) I and IV only
C) II and III only
D) II and IV only
Correct Answer:
Verified
Q42: Jason purchased a six-month put on ABC
Q43: NZMA stock is currently selling for $128.
Q44: For a call purchased on an organized
Q45: Grant purchased one call on XYZ stock
Q46: Investors buy options at the bid price
Q48: The value of a call increases as
Q49: Options premiums tend to be smaller as
Q50: The value of a put increases as
Q51: The buyer of a put and the
Q52: The most important factor affecting the market
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents