Gerold Purchased 3 Put Option Contracts at an Option Premium

question 20

Multiple Choice

Gerold purchased 3 put option contracts at an option premium of $.95 and a strike price of $40. At expiration, the stock price was $42.25 per share. What is his percentage return?

• A)−100.00%
• B)0%
• C)15.79%
• D)21.62%
• E)31.58%

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Definitions:

Prevention Costs

Expenses incurred to prevent defects in products or services, including training, quality control, and early design testing.

Schedule Of Activity

A detailed plan or timetable outlining specific tasks, milestones, or events to be completed within a defined period.

Costs

The amount of money required to purchase goods or services, or the expenses associated with manufacturing a product or providing a service.

Internal Failure Costs

Costs incurred to remedy defects found before the delivery of a product to the customer, such as waste, scrap, and rework.