You Sold a Put Contract on EDF Stock at an Option

question 16

Multiple Choice

You sold a put contract on EDF stock at an option price of $.50. The option had an exercise price of $21. The option was exercised. Today,EDF stock is selling for $20 a share. What is your total profit or loss on all of your transactions related to EDF stock assuming that you close out your positions in this stock today? Ignore transaction costs and taxes.

• A) -$150
• B) -$60
• C) -$50
• D) $60
• E) $150

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Definitions:

German Triangle

Refers to an area in the United States, particularly the cities of Cincinnati, St. Louis, and Milwaukee, known for their significant German immigrant populations and cultural influence in the 19th and early 20th centuries.

Large German Populations

Refers to the significant number of German immigrants or people of German descent living in a particular area or country.

Irish Potato Famine

A period of mass starvation, disease, and emigration in Ireland between 1845 and 1849 caused by potato blight.

Emigrants

Individuals who leave their country of origin to live permanently in another country, often in search of better living conditions, job opportunities, or to join family.