Several Rumors Concerning Wyslow Stock Have Started Circulating

question 39

Multiple Choice

Several rumors concerning Wyslow stock have started circulating.These rumors are causing the market price of the stock to become increasingly volatile.Given this situation,you decide to buy both a one-month put and a one-month call option on this stock with an exercise price of $15.You purchased the call at a quoted price of $.20 and the put at a price of $2.10.What will be your total profit on these option positions if the stock price is $6 on the day the options expire?

• A)$30
• B)$670
• C)$690
• D)$710
• E)$1,110

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Definitions:

Ireland

An island in the North Atlantic, divided into the Republic of Ireland, an independent nation, and Northern Ireland, part of the United Kingdom.

Puritans

A group of English Protestants in the 16th and 17th centuries who sought to purify the Church of England of Roman Catholic practices, maintaining that the Church of England was only partially reformed.

Anglicans

Members of the Church of England or of any churches in communion with it, which combine Catholic and Protestant traditions.

Petition of Right

A constitutional document submitted to Charles I by the English Parliament in 1628 to limit the king's authority and assert the rights of subjects, including freedom from arbitrary arrest and taxation without Parliament's consent.