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

Question

Quizplus · Accepted Answer

The elasticity of a stock put option is always negative. This is because the price of the option will decrease as the price of the underlying stock increases. As such, the percentage change in price of the option will always be negative when there is a positive percentage change in the price of the stock.

The Elasticity of a Stock Put Option Is Always