You Purchased 500 Shares of SLG, Inc

question 79

Multiple Choice

You purchased 500 shares of SLG, Inc., stock at a price of $43.70 a share. You then purchased put options on your shares with a strike price of $40.00 and an option premium of $.90. At expiration, the stock was selling for $47.80 a share. You sold your shares on the option expiration date. What is your net profit or loss on your transactions related to SLG, Inc., stock?

• A)$1,650
• B)$1,250
• C)$1,600
• D)$2,150
• E)$2,300

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Definitions:

Inventory

The raw materials, work-in-process products, and finished goods that a company holds for the purpose of sale in the near future.

Marketable Securities

Financial instruments that can be easily converted into cash, such as stocks, bonds, or treasury bills.

Operating Activities

Activities that relate directly to the primary business operations of a company, such as selling products or providing services.

Financing Activities

Transactions that involve raising capital for the business and repaying investors, such as issuing debt and equity or paying dividends.