A Put Option on a Stock Has an Exercise Price

question 19

Multiple Choice

A put option on a stock has an exercise price of $31.If the stock price at expiration is $29.45,what is the option payoff for a long put position?

• A)$29.45
• B)$0
• C)$1.55
• D)-$1.55
• E)-$29.45

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Definitions:

Steering Axle

The axle of a vehicle that includes the mechanism for steering, affecting the direction in which the vehicle travels.

Interaxle Differential

Differential gearing used between the drive axles on a tandem drive, highway tractor; divides torque between the two drive axles. Also known as a power divider.

Drive Wheel

A wheel of a vehicle that receives power from the engine or motor to move the vehicle forward or backward.

Spinout

A situation where a vehicle loses traction, causing it to rotate uncontrollably.