Question: 1. A put option on a stock is a contract to a. Purchase the stock at the premium price b. Sell the stock at the

1. A put option on a stock is a contract to

a. Purchase the stock at the premium price

b. Sell the stock at the strike price

c. Purchase the stock at the strike price

d. Sell the stock at the premium price

e. Purchase the stock at the market price

2. A stock is selling for $59.07 per share. A call option on the stock has a $56 strike price and a $2.40 premium. The call is:

a.Out of the money because the option's premium is below the stock's market price

b. Out of the money because the option premium is below the option strike price

c. Out of the money because the option's strike price is below the stock's market price

d. In the money because the option premium is below the option strike price

e. In the money, because the option's strike price is below the stock's market price

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