You Have a Long Position in a Stock That You

question 20

Multiple Choice

You have a long position in a stock that you purchased for $100,and a short position in a put option on the same stock at strike K = 100.At maturity the stock price is $95,and you liquidate your stock and option positions.Your gross payoff (cash flow) is

• A)$0
• B)$5
• C)$90
• D)$95

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Definitions:

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