If the price of corn is currently $4.00 per bushel, which of the following is tr
ID: 2714516 • Letter: I
Question
If the price of corn is currently $4.00 per bushel, which of the following is true?
A. The call option with a strike price of $3 is worth less than the put option with a strike price of $3
B. The call option with a strike price of $3 is worth less than the call option with a strike price of $4.
C. The put option with a strike price of $3 is worth less than the put option with a strike price of $4.
D. If the price of corn increases to $4.50 then the value of the put option will increase
A. The call option with a strike price of $3 is worth less than the put option with a strike price of $3
B. The call option with a strike price of $3 is worth less than the call option with a strike price of $4.
C. The put option with a strike price of $3 is worth less than the put option with a strike price of $4.
D. If the price of corn increases to $4.50 then the value of the put option will increase
Explanation / Answer
answer c is true.The put option with a strike price of $3 is worth less than the put option with a strike price of $4.
value of put option decreases with increase in strike price