The Buyer of a Long Put Option

question 81

Multiple Choice

The buyer of a long put option:

• A)has a maximum loss equal to the premium paid.
• B)has a gain equal to but opposite in sign to the writer of the option.
• C)has maximum gain potential limited to the difference between the strike price and the premium paid.
• D)all of the above

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Definitions:

Target Return-on-sales Pricing

A pricing strategy where the price is set with the aim of achieving a specific return on sales percentage.

Profit Percentage

A financial metric that shows what percentage of sales has turned into profits, indicating the efficiency of a company's operations.

Sales Volume

The total quantity of goods or services sold by a company within a specific period.

Target Return-on-sales Pricing

A pricing strategy aiming to achieve a specific return on sales, calculated by setting prices based on the desired profit margin over costs.