You Write a Put Option on a Share

question 47

Multiple Choice

You write a put option on a share. The profit at contract maturity of the option position is ________ where X equals the option's strike price, ST is the share price at contract expiration and P0 is the original premium of the put option.

• A)Max(P₀, X - S_T - P₀)
• B)Min(-P₀, X - S_T - P₀)
• C)Min(P₀, S_T - X + P₀)
• D)Max(0, S_T - X - P₀)

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Definitions:

Economically

Pertains to the manner in which resources are used and managed in the production, distribution, and consumption of goods and services.

Fujita-Pearson Scale

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The practice of taking someone else's work or ideas and passing them off as one's own.