Question
15. It is September and an investor is seeking a put option contract to hedge an existing stock position. The investor is deciding whether to
15.
It is September and an investor is seeking a put option contract to hedge an existing stock position. The investor is deciding whether to chose the November option contract or December option contract, both with the same strike price. Which contract would likely have a higher option premium?
Group of answer choices
The premium will be the same if the strike price is the same.
November because the closer the contract expiration, the higher the premium.
The premium only depends on the price of the stock, not the time to expiration.
December because the longer the time to maturity, the higher the option premium.
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