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:

Factory System

An organizational method for manufacturing involving a concentrated location of equipment and labor to produce goods on a large scale.

Consumer Research

The process of gathering and analyzing information about consumers' preferences, behaviors, and perceptions to improve product development, marketing, and decision-making.

Industrial Entrepreneurs

Individuals who initiate, manage, and operate businesses in the industrial sector, focusing on the production and manufacturing of goods.

Strategic Alliance

An official contract between two or more entities to follow a series of mutually decided goals while maintaining their independent statuses.