You Own 8 Put Option Contracts on JL Industrial Stock

question 78

Multiple Choice

You own 8 put option contracts on JL Industrial stock. You paid an option premium of $0.80 for a strike price of $42.50. On the option expiration date, the stock was selling for $41.25 a share. What is your percentage return?

• A) -100 percent
• B) -18.75 percent
• C) 11.26 percent
• D) 18.75 percent
• E) 56.25 percent

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Definitions:

Diffuse Status Characteristics

Information about a person’s abilities that are only obliquely relevant to the group’s task, and derive mainly from large-scale category memberships outside the group.

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Consensual Positive Validation

The process through which individuals seek validation and approval for their beliefs or actions from others, typically within a social group that shares similar views.

Fear of Death

A common anxiety that involves dread or apprehension about the prospect of dying or the process of dying.