You Purchased 7 Put Option Contracts on Alto Industries

question 67

Multiple Choice

You purchased 7 put option contracts on Alto Industries. The strike price was $42.50 and the option premium was $1.30. On the expiration date, the stock was valued at $41.40 a share. What is the payoff on the option contracts?

• A)−$140
• B)$0
• C)$110
• D)$360
• E)$770

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Definitions:

Optimistic Outlook

The tendency to maintain a positive attitude and expect good outcomes even in face of difficulties.

Empirical Approach

A method of inquiry that relies on direct and indirect observation or experience, as well as empirical evidence, to gain knowledge, often used in scientific research to test hypotheses and theories.

Physical Health

Pertains to the well-being of the body, free from illness, injury, or pain, and the maintenance thereof through nutrition, exercise, and lifestyle habits.

Speculation

Inference or consideration of a subject without firm evidence.