Assume That a $50 Strike Put Pays a 2

question 18

Multiple Choice

Assume that a $50 strike put pays a 2.0% continuous dividend,r = 0.07,σ = 0.25,and the stock price is $48.00.What is the profit or loss,per share,for a short put position if the option expires in 60 days and the price rises to $50.00 after 5 days?

• A) $1.05 loss
• B) $1.05 gain
• C) $1.12 gain
• D) $1.12 loss