Consider the following statement related to buying a put option.For a given stock price,the ____________ the position is held,the more time value it loses and the ___________ the profit;however,an exception can occur when the stock price is ___________.Identify the correct words for these two blanks.
A)longer,lower,low
B)longer,higher,high
C)shorter,lower,low
D)shorter,higher,high
E)longer,flatter,low

Question

Quizplus · Accepted Answer

The longer a put option is held, the more time value it loses, and the lower the profit. This is because as time passes, the likelihood of the stock price falling below the strike price decreases. However, when the stock price is low, the profit can still be high despite the loss of time value.

Consider the Following Statement Related to Buying a Put Option