The Price of a Stock on February 1 Is $48

question 7

Multiple Choice

The price of a stock on February 1 is $48.A trader sells 200 put options on the stock with a strike price of $40 when the option price is $2.The options are exercised when the stock price is $39.The trader's net profit or loss is

• A) Loss of $800
• B) Loss of $200
• C) Gain of $200
• D) Loss of $900

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Definitions:

Attribution Theory

The theory of how people make attributions.

Primacy Effect

Tendency to remember information at the beginning of a body of information better than the information that follows.

Cognitive Dissonance

A psychological theory that suggests discomfort arises when a person holds conflicting beliefs, attitudes, or values, often leading to changes in one of the beliefs or behaviors.

Primacy Effect

The tendency to remember information at the beginning of a list better than the information that follows.