Exhibit 20 -Refer to Exhibit 20

question 81

Multiple Choice

Exhibit 20.3
Use the Information Below for the Following Problem(S)
On the last day of October, Bruce Springsteen is considering the purchase of 100 shares of Olivia Corporation common stock selling at $37 1/2 per share and also considering an Olivia option.
$\begin{array}{lcccc} &\quad\quad\quad\quad\quad\quad\quad\quad {\text { Calls }} &&\quad\quad\quad\quad\quad\quad\quad\quad {\text { Puts }} \\\text { Price } & \text { December } & \text { March } & \text { December } & \text { March } \\\hline 35 & 3\quad3 / 4 & 5 & 1\quad1 / 4 & 2 \\40 & 2\quad1 / 2 & 3\quad1 / 2 & 4\quad1 / 2 & 4\quad3 / 4\end{array}$
-Refer to Exhibit 20.3.If Bruce buys a March put option with an exercise price of 40,what is his dollar gain (loss) if he closes his position when the stock is selling at 43 1/2?

• A) $825.00 loss
• B) $475.00 loss
• C) $350.00 loss
• D) $25.00 loss
• E) He has a gain

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Definitions:

Settlement Agreement

A legally binding contract where parties in a dispute agree on specific terms to resolve the matter without further litigation.

Wrongful Expulsion

An unjust or improper removal or exclusion of an individual from a group, organization, or place.

Implied Authority

The authority of an agent that arises by inference from the words and actions of the principal.

Express Authority

The authority of an agent that arises when the principal explicitly instructs the agent to do something. Also called actual authority.