For the Writer of a Put Option,if the Underlying Share

question 40

Multiple Choice

For the writer of a put option,if the underlying share price:

• A) moves above the strike price the potential profits are unlimited.
• B) drops below the strike price the potential profits are unlimited.
• C) moves above the strike price, the potential profits are limited to the premium.
• D) moves above the strike price, the premium is reduced by the difference.

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Definitions:

Effort

The use of physical or mental energy to accomplish a task or objective.

Satisfaction

A measure of how well expectations and desires are met, often related to happiness, contentment, or fulfillment in various aspects of life or work.

Realistic Job Preview

An honest overview of a job provided to candidates before they decide to accept a position, highlighting both positives and negatives.

Negative Factors

Elements or conditions within an environment that detract from the objectives or desired outcomes, often leading to negative consequences.