A Put Option You Own Is Going to Expire in One

question 181

Multiple Choice

A put option you own is going to expire in one second. The current stock price is $25 and the strike price of your option is $30. Which of the following statements is NOT true?

• A) Your option has intrinsic value.
• B) Your option should be exercised or sold.
• C) You have the right to sell the stock for $30.
• D) Someone other than you stands to gain $5 per share when the option is exercised.
• E) Your option is in-the-money.

Understand the principles of contract performance, including substantial performance and conditions for complete performance.

Recognize the significance and application of liquidated and consequential damages in contract breaches.

Grasp the concepts of impossibility of performance and warranties under the Uniform Commercial Code (UCC).

Differentiate between UCC governance and common law principles in contracts.

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Definitions:

Ending Capital

Beginning Capital + Additional Investments + Net Income – Withdrawals = Ending Capital. Or: Beginning Capital + Additional Investments – Net Loss – Withdrawals = Ending Capital.

Worksheet

A document used by accountants to gather information from financial statements, adjust and close entries, and prepare financial statements.

Plant, Property

Plant, Property, often followed by and Equipment (PP&E), represents long-term assets owned by a company, used in its operations.

Equipment

Tangible assets used in operations, such as machinery or office equipment, not intended for sale.