You Recently Purchased Three Put Option Contracts on Guillepsi Stock

question 17

Multiple Choice

You recently purchased three put option contracts on Guillepsi stock with an exercise price of $42.50.What is the total intrinsic value of these contracts if the stock is currently selling for $45 a share?

• A)-$360
• B)-$120
• C)$0
• D)$120
• E)$360

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Definitions:

Automobile

A self-propelled vehicular machine designed primarily for transportation of people or goods over roads.

Loan

Money, property or other material goods given to another party in exchange for future repayment of the loan value or principal amount, along with interest or finance charges.

Chattel Mortgage

A loan arrangement in which an item of movable personal property acts as collateral for the loan.

Conditional Sales Contract

An agreement where the buyer takes possession of an item but its formal title and ownership remain with the seller until all terms of the contract are fulfilled.