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:

Independent Variable

In experimental and statistical research, the variable that is manipulated or changed to observe its effect on a dependent variable.

Dependent Variable

In experimental research, it is the variable that is measured to see if it is influenced by the independent variable.

Experiment

A research method used to test hypotheses and establish cause-and-effect relationships between variables, through controlled conditions and manipulation of one or more variables.

Temporal Sequence

The chronological order in which events or actions occur, emphasizing the importance of timing in understanding cause and effect.