Several Rumors Concerning Wyslow, Inc

question 413

Multiple Choice

Several rumors concerning Wyslow, Inc. stock have started circulating. These rumors are causing the market price of the stock to be quite volatile. Given this situation, you decide to buy both a one-
Month put and a call option on this stock with an exercise price of $15. You purchased the call at a
Quoted price of $.20 and the put at a price of $2.10. What will be your total profit or loss on these
Option positions if the stock price is $4 on the day the options expire?

• A) -$230
• B) $870
• C) $890
• D) $910
• E) $1,310