Suppose You Bought 10 Smith Enterprise Put Options with a Strike

question 18

Multiple Choice

Suppose you bought 10 Smith Enterprise put options with a strike price of $52 at $2.75 per option.If the price of Smith stock is $48,what is your net profit (or loss) ? Ignore transaction costs.

• A) $40
• B) $0
• C) $12.50
• D) -$27.50

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Definitions:

Advantages

Benefits or favorable factors that contribute to success or achieving a goal.

Cellular Phone Carrier

Companies that provide services for mobile phone users, including voice communication and data transfer.

Number Of Options

The count of choices or alternatives available in a given situation or decision-making process.

Decision Making

The cognitive process of selecting a course of action among multiple alternatives, often involving a balance between risk and reward.