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:

Multifunction Device

An electronic device that combines several functionalities, such as printing, scanning, copying, and faxing, into one machine.

CPU

The central processing unit, or CPU, is the primary component of a computer that performs most of the processing inside a computer.

OLED

A display technology featuring organic compounds that emit light in response to an electric current, known for high contrast ratios and deep blacks.

ROM

Read-Only Memory, a type of non-volatile storage that is used to hold permanent data and instructions for electronic devices.