USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 77

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. What is Sarah's annualized gain/loss?

• A) 11.51 percent gain
• B) 115.15 percent gain
• C) 11.51 percent loss
• D) 115.15 percent loss
• E) 0 percent

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