You Own 200 Shares of Delta Stock, Which Is Currently

question 21

Multiple Choice

You own 200 shares of Delta stock, which is currently worth $33 a share. You just paid an option premium of $.55 to buy two put contracts on this stock with a strike price of $30. What is the maximum loss per share you are avoiding by purchasing the option contract?

• A)$30.00
• B)$30.85
• C)$32.15
• D)$33.00
• E)$33.85

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Definitions:

Chattel Paper

A writing that indicates both a monetary obligation and a security interest in specific goods.

Monetary Obligation

A legal requirement to pay a certain amount of money, arising from contractual agreements, fines, or other legal instruments.

Security Interest

A legal claim or right granted over assets as security for the repayment of a debt or performance of some obligation.

Personal Property

Any form of property that is movable and not fixed permanently to one location, as opposed to real property or real estate.