You Purchase One IBM July 120 Put Contract for a Premium

question 79

Multiple Choice

You purchase one IBM July 120 put contract for a premium of $3.You hold the option until the expiration date when IBM stock sells for $123 per share.You will realize a ______ on the investment.

• A) $300 profit
• B) $300 loss
• C) $500 loss
• D) $200 profit

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Definitions:

NaBH4

Sodium borohydride, a reducing agent commonly used in the reduction of ketones and aldehydes to alcohols.

HNO3

Nitric acid, a highly corrosive and toxic strong acid used in the manufacture of fertilizers and explosives.

D-Tagatose

A ketohexose sugar related to fructose that has potential health benefits and is used as a low-calorie sweetener.

Keto-Enol Tautomerization

A chemical equilibrium between a ketone and its corresponding enol (a compound with a double bond and a hydroxyl group connected to the same carbon), highlighting the mobility of hydrogen and electrons.