USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 68

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Sarah Kling bought a six-month Peppy Cola put option with an exercise price of $55 for a premium of $8.25 when Peppy was selling for $48.00 per share.
-Refer to Exhibit 14.3. If at expiration Peppy is selling for $42.00, what is Sarah's dollar gain or loss?

• A) $420 gain
• B) $420 loss
• C) $475 loss
• D) $475 gain
• E) $525 gain

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Definitions:

Intellectual Development

The growth of cognitive abilities and capacities from infancy through adulthood.

Low-Income Children

Refers to children living in families with incomes below the federally defined poverty level, affecting their access to resources and opportunities.