Jennifer Purchased 5 Put Option Contracts on Winslow Mfg

question 37

Multiple Choice

Jennifer purchased 5 put option contracts on Winslow Mfg. stock. The option premium was $0.20 and the strike price was $17.50. On the expiration date, the stock was selling for $17.75 a share. What is the total payoff on the option contracts?

• A) -$100
• B) -$50
• C) $0
• D) $50
• E) $150

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Definitions:

Knowledge Bias

The distortion of information in favor of a person's pre-existing beliefs or knowledge.

Refutational Arguments

Arguments that are constructed to specifically counter or refute opposing viewpoints, often used in persuasive communication to increase the effectiveness of the message.

Different Sources

Various origins from which information, materials, or inputs can be obtained.

Hype

An intense promotional or advertising campaign designed to create excitement or interest in a product, service, or concept.