Today, You Purchased 300 Shares of Lazy Z Stock for $49.80

question 25

Multiple Choice

Today, you purchased 300 shares of Lazy Z stock for $49.80 per share. You also bought three 1-year, $50 put options on Lazy Z stock at a cost of $.55 per share. What is the maximum total amount you can lose over the next year on these purchases?

• A) −$15,105
• B) −$11,050
• C) −$160
• D) −$105
• E) $0

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Definitions:

Final Control Element

The Final Control Element in a control system is the device, such as a valve or actuator, that directly manipulates the physical process based on control signals.

Integral Action

A control action in which the controller output is proportional to the duration and magnitude of the error signal, commonly used in PID controllers.

Proportional Plus Derivative

A control method in feedback system design that uses a combination of the proportional and derivative actions to improve system response and stability.