The value of a stock put option is positively related to the following factors except
A)the time to expiration.
B)the striking price.
C)the stock price.
D)All of the options are correct.

Question

Quizplus · Accepted Answer

The value of a stock put option is negatively related to the stock price, not positively related. This is because as the stock price goes down, the put option becomes more valuable as the holder can sell the stock at a higher price than the current market value. Therefore, option C is incorrect. The other options, time to expiration and striking price, have a positive relationship with the value of a put option.

The Value of a Stock Put Option Is Positively Related