You Own 100 Shares of Deltona Stock Which Is Currently

question 69

Multiple Choice

You own 100 shares of Deltona stock which is currently worth $43 a share.You just paid an option premium of $0.85 to buy one put contract on this stock with a strike price of $40.What is the maximum loss per share you are avoiding by purchasing the option contract?

• A)$40.00
• B)$40.85
• C)$42.15
• D)$43.00
• E)$43.85

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Definitions:

Assets Liabilities

Assets are resources owned by a business that have economic value, while liabilities are obligations of a business to transfer resources to another entity in the future.

Accounting Period

A specific period of time used for financial reporting purposes, usually a quarter or a year, to measure business activities and prepare financial statements.

Trial Balance

A bookkeeping report that lists the balances of all ledgers in two columns, debits and credits, ensuring that total debits match total credits.

Chart of Accounts

A systematic listing of all accounts used by an organization, categorized to facilitate financial reporting and bookkeeping.