Jason Purchased a Six-Month Put on ABC Stock at a Cost

question 82

Multiple Choice

Jason purchased a six-month put on ABC stock at a cost of $100. The strike price was $15. At what market price does Jason just break-even on this investment? Ignore transaction costs and taxes.

• A) $15
• B) $16
• C) $14
• D) cannot be determined from the information provided

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Definitions:

Statistical Reasoning

The process of using statistical techniques and methods to analyze data and make conclusions based on data analysis.

Deliberate System

A cognitive process characterized by the slow, logical, and conscious evaluation of information, contrasting with automatic, quick, and unconscious processing.

Automatic System

Processes in the brain that occur without conscious effort, often quickly and based on learned routines.

Statistical Reasoning

The process of using statistical methods and principles to analyze, interpret, and draw conclusions from data.