You Sold fiVe Put Option Contracts on QLN Stock with an Exercise

question 359

Multiple Choice

You sold five put option contracts on QLN stock with an exercise price of $45 and an option price of $2.20. Today, the option expires and the underlying stock is selling for $38.65 a share. Ignoring
Trading costs and taxes, what is the total profit or loss on this investment?

• A) -$2,075
• B) -$415
• C) $855
• D) $1,100
• E) $4,275

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Definitions:

Perceptual Selection

The process by which individuals screen and select various stimuli in their environment to process and interpret.

Internal Factor

Elements or forces within an individual, such as personal skills, emotions, or beliefs, that influence their actions or decisions.

Pollyanna Principle

A tendency for people to remember pleasant items more accurately than unpleasant ones.

Pleasant Stimuli

stimuli that are enjoyable or satisfying to experience, often invoking a positive emotional response.