Joe Sold a Put Option on ZZZ Corp

question 62

Multiple Choice

Joe sold a put option on ZZZ Corp.with an exercise price of $40.The option is about to expire and ZZZ stock is currently trading at $28 per share.What is the value of Joe's position?

• A) $12
• B) −$12
• C) $8
• D) $16

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Definitions:

Hypersecretion

The condition of excessive production of hormones or other bodily substances.

Biguanides

A class of oral hypoglycemic agents used to treat type 2 diabetes by reducing glucose production in the liver.

Glucose

A colorless or yellow, thick, syrupy liquid obtained by the incomplete hydrolysis of starch; a simple sugar.

Thiazolidinediones

A class of medications used to lower blood sugar levels in the treatment of type 2 diabetes by increasing insulin sensitivity.