A Put Option Is Purchased and Held for 1 Year

question 2

Multiple Choice

A put option is purchased and held for 1 year.The Exercise price on the underlying asset is $40.If the current price of the asset is $36.45 and the future value of the original option premium is (-$1.62) ,what is the put profit,if any,at the end of the year?

• A) $1.62
• B) $1.93
• C) $3.55
• D) $5.17

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Definitions:

Crystallized Intelligence

Intellectual ability that reflects accumulated knowledge acquired through experience and learning.

Intelligence

The capacity for learning, understanding, and applying knowledge and skills, often measured through IQ or other cognitive assessments.

Cognitive Development

The process by which individuals gain and enhance their ability to think, learn, and solve problems over time.

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The period in human life after adolescence, typically marked by full physical growth, maturity, and legal responsibilities.