A Speculator Purchased a Put Option with an Exercise Price

question 76

Multiple Choice

A speculator purchased a put option with an exercise price of $56 for a premium of $10. The option was exercised a few days later when the stock price was $44. What was the return to the speculator?

• A)-20 percent
• B)120 percent
• C)-100 percent
• D)20 percent

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