Suppose You Bought 10 Smith Enterprise Put Options with a Strike

question 71

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 $56,what is your net profit (or loss) ? Ignore transaction costs.

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

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Definitions:

Inference Forms

Patterns of reasoning that determine the validity of an argument by analyzing its structure.

HS

A logical argument pattern of hypothetical syllogism, involving two conditional statements leading to a conclusion.

MP

Stands for "Member of Parliament," but in a logical context, it refers to a deductive pattern of reasoning where a specific conclusion is inferred from a general rule and a specific case.

Conj

An abbreviation for "Conjunction," a logical operator that connects two conditions or propositions where both must be true.