Martin Owns 15,000 Shares of Stock That He Wants to Sell

question 3

Multiple Choice

Martin owns 15,000 shares of stock that he wants to sell sometime within the next three months. Shares of this stock are currently selling for $43.24. The stock has been increasing in price but Martin is concerned the price might start to fall. He is not yet willing to sell his shares just in case the price rises some more. To guarantee that he can receive at least $42.50 a share when he does sell, Martin could purchase _____ with a strike price of $42.50.

• A) 1,500 warrants
• B) 150 calls
• C) 15,000 puts
• D) 1,500 puts
• E) 150 puts

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