Suppose That a Stock Sells at a Price of $60

question 35

Multiple Choice

Suppose that a stock sells at a price of $60 on the expiration date. Compute the payoff to the seller of a put option if the option strike price is $20.

• A) -$20
• B) -$10
• C) 0
• D) $40

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Definitions:

Relieve Pain

The process or action of reducing, alleviating, or eliminating physical discomfort or suffering.

Parasympathetic Nervous System

A branch of the autonomic nervous system that conserves energy by slowing the heart rate, increasing intestinal and gland activity, and relaxing sphincter muscles in the gastrointestinal tract.

Somatic Nervous System

The part of the peripheral nervous system associated with voluntary control of body movements through the action of skeletal muscles.

Sympathetic Nervous System

A branch of the autonomic nervous system that activates what is often termed the fight or flight response.