For a(n) ________ put option, the higher the stock price, the lower the value of the option.
A) American
B) European
C) Asian
D) A & B

Question

Quizplus · Accepted Answer

Both American and European put options decrease in value as the stock price increases, because the benefit of selling a stock at a set price becomes less attractive when the market price is higher. Asian options, which are based on the average price of the stock over a period, are not specifically mentioned in this context, but the principle generally applies to American and European options.

For A(n) ________ Put Option, the Higher the Stock Price