USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 16

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
On the last day of October, Bruce Springsteen is considering the purchase of 100 shares of Olivia Corporation common stock selling at $37 1/2 per share and is considering an Olivia option.

-Refer to Exhibit 14.1. If Bruce buys a March put option with an exercise price of 40, what is his dollar gain (loss) if he closes his position when the stock is selling at 43 1/2?

• A) $825.00 loss
• B) $475.00 loss
• C) $350.00 loss
• D) $25.00 loss
• E) $50.00 gain

---

Definitions:

Negligently Failed

The act of failing to take reasonable care in doing something, leading to unintended harm or damage.

Trial Court

A court in which most civil or criminal cases start when they first enter the legal system. The parties present evidence and call witnesses to testify. Trial courts are referred to as courts of common pleas or county courts in state court systems and district courts in the federal system. Also called court of original jurisdiction and court of first instance.

Manufacturer Negligent

A situation when a manufacturer fails to ensure the safety and efficacy of their product, resulting in harm to consumers.

Failing To Warn

The legal culpability faced by an entity for not properly informing consumers or users of a product's latent dangers or risks, potentially leading to harm.