You Own 4 Put Option Contracts on ALZ Stock

question 7

Multiple Choice

You own 4 put option contracts on ALZ stock. The contracts have a $17.50 strike price and you paid an option premium of $.40. What is the break-even stock price?

• A)$17.10
• B)$17.30
• C)$17.50
• D)$17.70
• E)$17.90

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Definitions:

Breach of Contract

A situation where one or more parties fail to fulfill the terms agreed upon in a contract.

Injured Party

An individual or group that has suffered harm or damage due to another person's actions or a breach of contractual obligations.

Performance

Execution or completion of duties or tasks as required or agreed upon in a contract.

Material Breach

A significant failure to perform a part of a contract that permits the other party to either demand performance or terminate the agreement.