Rosalita Purchased a Put Option with a Strike Price of $40

question 38

Multiple Choice

Rosalita purchased a put option with a strike price of $40. She paid a total of $140 for the contract. What is the break-even stock price?

• A) $38.40
• B) $39.60
• C) $40.00
• D) $41.60
• E) $42.80

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Definitions:

Study Group

A group of students who meet regularly to discuss and learn course material together, enhancing understanding through collaboration.

Learning Style

An individual's preferred or most effective approach to acquiring new information or skills.

Right-Brain Dominant

A characteristic of individuals who are thought to have a brain function that favors creativity, emotion, and intuitive thinking — concepts that are part of the popular but scientifically disputed right-brain/left-brain theory.

Cornell System

A method of note-taking that involves dividing the paper into three sections: a narrow margin to the left for key ideas or questions, a larger right-hand space for notes, and a summary section at the bottom.