Multiple Choice
Consider three put options at strikes 40, 50, and 60. The price of the 40-strike option is $4 and the price of the 60-strike option is $8. Which of the following statements is most accurate? (Assume all options have the same maturity.)
A) The price of the 50-strike put is less than $10.
B) The price of the 50-strike put is less than $6.
C) The price of the 50-strike put is greater than $6.
D) The price of the 50-strike put is greater than $7.
Correct Answer:
Verified
Correct Answer:
Verified
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