You Purchase One IBM March 200 Put Contract for a Put

question 57

Multiple Choice

You purchase one IBM March 200 put contract for a put premium of $6. What is the maximum profit that you could gain from this strategy?

• A) $20,000
• B) $20,600
• C) $19,400
• D) $19,000

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Definitions:

Fixed Assets

Long-term tangible assets used in the operations of a business that are not expected to be converted into cash in the near future.

Sales Increase

A rise in the volume or value of product units or services sold by a company, indicating growth in business activity.

Retention Ratio

The proportion of net income that is retained in the business rather than distributed to shareholders as dividends.

Dividend Payout Ratio

A financial indicator showing the proportion of a company's profits distributed to its shareholders as dividends.