A Speculator Purchases a Put Option for a Premium of $4

question 52

Multiple Choice

A speculator purchases a put option for a premium of $4, with an exercise price of $30. The stock is presently priced at $29 and rises to $32 before the expiration date. What is the maximum profit per unit to the speculator who owned the put option assuming he or she exercises the option at the ideal time?

• A)- $4
• B)- $3
• C)- $2
• D)$2
• E)$3

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