A Put Option on a Stock Has an Exercise Price

question 22

Multiple Choice

A put option on a stock has an exercise price of $42.If the stock price at expiration is $35,what is the option payoff for a short put position?

• A)$0
• B)$7
• C)-$7
• D)$35
• E)-$35

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Definitions:

SCSI

Abbreviation for Small Computer System Interface, a set of standards for connecting and transferring data between computers and peripheral devices.

EFI Partition

A partition on a hard drive used as a part of the UEFI (Unified Extensible Firmware Interface) to store boot files and drivers.

BIOS

Basic Input/Output System (BIOS) is firmware used to perform hardware initialization during the booting process and to provide runtime services for operating systems and programs.

Operating System

Software that manages computer hardware and software resources and provides common services for computer programs.