Gerold Purchased 3 Put Option Contracts at an Option Premium

question 57

Multiple Choice

Gerold purchased 3 put option contracts at an option premium of $0.95 and a strike price of $40.At expiration,the stock price was $42.25 per share.What is his percentage return?

• A) -100 percent
• B) 0 percent
• C) 15.79 percent
• D) 21.62 percent
• E) 31.58 percent

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Definitions:

Level of Significance

The threshold under which a statistical result is considered statistically significant, traditionally set at 0.05 or 5%.

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution or parameter estimate, impacting the shape and scale of the distribution.

Rule of 5

An empirical rule suggesting that a sample of size five is often sufficient for capturing the median of a population, specifically under conditions reflected in the five-number summary.

Independent Events

Two or more events whose occurrence or outcome does not affect one another.