The Price of a Stock on February 1 Is $124

question 15

Multiple Choice

The price of a stock on February 1 is $124.A trader sells 200 put options on the stock with a strike price of $120 when the option price is $5.The options are exercised when the stock price is $110.The trader's net profit or loss is

• A) Gain of $1,000
• B) Loss of $2,000
• C) Loss of $2,800
• D) Loss of $1,000

---

Definitions:

Unwarranted Assumptions

Beliefs or premises accepted without sufficient evidence or justification, often leading to flawed conclusions.

Restructuring

A cognitive process in problem-solving and learning that involves changing the problem's representation or the solution's approach.

Mastership

The possession or demonstration of masterly skill or great proficiency.

Larger Chunks

In memory studies, this refers to the process of organizing individual pieces of information into larger, more manageable units or groups.