You Purchased 5 Put Option Contracts on Mountain Builders Stock

question 87

Multiple Choice

You purchased 5 put option contracts on Mountain Builders stock at an option premium of $.70. The strike price is $30. What is your break-even stock price?

• A)$19.90
• B)$24.35
• C)$25.00
• D)$29.30
• E)$30.70

---

Definitions:

Final Good

A product that is consumed directly by the end-user or customer and will not be used to produce any further goods or services.

Laundry Services

Services provided by businesses to clean clothing and textiles for individuals or commercial customers.

Gross Domestic Product

A measure of the economic performance of a country, reflecting the market value of all final goods and services produced within a country's borders in a given period.

Corporate Bond

A debt security issued by a corporation to raise capital from investors, promising to pay back the principal amount with interest.