The Maximum Possible Payoff to the Owner of a Put

question 49

Multiple Choice

The maximum possible payoff to the owner of a put options is:

• A) the stock price.
• B) the exercise price minus the stock price.
• C) the option's exercise price.
• D) there is no maximum.

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Definitions:

Credit

A bookkeeping entry that increases the value of liabilities or equity accounts, or decreases the value of an asset or expense account.

Journal

A detailed record where all financial transactions of a business are initially recorded.

Chronological Record

A record of events or transactions organized in the order they occurred over time.

Transactions

The exchange or transfer of goods, services, or funds between two or more parties.