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

question 43

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 stock price at which the speculator would break even? ​

• A)$26
• B)$34
• C)$28
• D)$29
• E)$32

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Definitions:

Four-Fifths Rule

The four-fifths rule suggests that disparate impact exists if a selection criterion (e.g., a test score) results in a selection rate for a protected class that is less than four-fifths (80 percent) of that for the majority group.

Protected Class

A protected class consists of all individuals who share one or more common characteristics as indicated by that law.

Illegal Discrimination

Results from behaviors or actions by an organization or managers within an organization that cause members of a protected class to be unfairly differentiated from others.

Protected Class

Groups of people who are legally protected from discrimination by law, based on characteristics such as race, gender, age, or religion.