An investor buys a put option with an exercise price of $40 when the stock price is $42. The option premium is $1. At expiration the stock price is $37. The investor will realize____________. A. a loss of $2. B. a loss of $3. C. a profit of $1. D. a profit of $2.
An investor buys a put option with an exercise price of $40 when the stock price is $42. The option premium is $1. At expiration the stock price is $37. The investor will realize____________. A. a loss of $2. B. a loss of $3. C. a profit of $1. D. a profit of $2.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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An investor buys a put option with an exercise price of $40 when the stock price is $42. The option premium is $1. At expiration the stock price is $37. The investor will realize____________.
A. a loss of $2.
B. a loss of $3.
C. a profit of $1.
D. a profit of $2.
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