A Put Option Was Purchased Two Months Ago for $3

question 26

Multiple Choice

A put option was purchased two months ago for $3.70 with an exercise price of $50. The option is exercised when the market price of the stock is $48. What is the net profit or loss to the investor?

• A) $3.00
• B) $2.70
• C) −$1.70
• D) −$2.00
• Answer Key
• Test name: Chapter 21

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Definitions:

Direct Costs

Costs that are directly attributable to the production of goods or provision of services, such as raw materials and direct labor.

Indirect Costs

Costs that are not directly attributable to the production of goods or services and cannot be traced back to a single product, service, or project, such as rent and utilities.

Responsibility Accounting System

An accounting framework that tracks financial performance by specific areas of responsibility, such as departments or managers.

Managers' Performance

Refers to the assessment and evaluation of the effectiveness and efficiency with which managers achieve business objectives and goals.