The price of a stock put option is ________ correlated with the stock price and ________ correlated with the exercise price.
A) negatively; negatively
B) negatively; positively
C) positively; negatively
D) positively; positively

Question

Quizplus · Accepted Answer

The price of a stock put option is negatively correlated with the stock price, meaning when the stock price goes up, the put option price goes down, and vice versa. It is positively correlated with the exercise price, meaning when the exercise price goes up, the put option price also goes up, and vice versa. Therefore, the correct answer is B.

The Price of a Stock Put Option Is ________ Correlated