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

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Definitions:

Economic Conditions

The state of the economy at a given time, influenced by factors like inflation rates, unemployment levels, GDP growth, and market demand.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Gross Domestic Product

A measure of the economic output of a country, calculated as the total value of all goods and services produced over a specific time period.

Human Sustainability

The practice of ensuring that actions and policies today do not diminish the health, welfare, and opportunities for future generations of humans.