The elasticity of a stock put option is always
A) positive.
B) smaller than one.
C) negative
D) infinite
E) none of these.

Question

Quizplus · Accepted Answer

The elasticity of a stock put option is always negative. This is because as the price of the underlying stock increases, the price of the put option decreases, leading to a negative relationship between the two variables. The magnitude of the elasticity may vary depending on the strike price, time to expiration, and other factors, but it will always be negative.

The Elasticity of a Stock Put Option Is Always