You Bought a Put Option Contract with a Strike Price

question 41

Multiple Choice

You bought a put option contract with a strike price of $37.50 and a premium of $1.80. At expiration, the stock was selling for $35 a share. What is the net total amount you received for your shares assuming that you disposed of your shares on the expiration date?

• A)$3,680
• B)$3,930
• C)$3,570
• D)$3,330
• E)$3,320

---

Definitions:

Drawer

In the context of banking and finance, it refers to the person who writes or issues a cheque or draft instructing the bank to pay a specified sum.

Unconditional

refers to something that is not subject to any conditions or limitations.

Express Condition

A specific and unequivocal condition in a contract that must be met for the contract's obligations to be enforced or remain in effect.

Absolute

Complete and total without any conditions, restrictions, or exceptions.