Question

A put option on $15,000 with a strike price of 0.666/$ is the same thing as a call option on 10,000 with a strike price of 1.50

a) True
b) False
c) Cannot be determined
d) Depends on market conditions

Answer 1

A put option on $15,000 with a strike price of 0.666 per dollar is not the same as a call option on $10,000 with a strike price of 1.50 per dollar, because these options have different rights and strike prices applied to different amounts of underlying assets.

Step-by-step explanation:

The question is asking whether a put option on $15,000 with a strike price of 0.666 per dollar is equivalent to a call option on $10,000 with a strike price of 1.50 per dollar. The answer is b) False. A put option provides the owner the right to sell an asset at a specified price (strike price), whereas a call option provides the right to buy an asset at the strike price.

The values of these options are not equivalent because they confer different rights and obligations and the amounts of the underlying assets are different. Additionally, the strike price of the put option, when applied to $15,000, will result in a different value than the strike price of the call option applied to $10,000. Therefore, the two options are not the same.