USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 20

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) 60.60 percent gain
• B) 6.06 percent loss
• C) 60.60 percent loss
• D) 6.06 percent gain
• E) 0 percent

---

Definitions:

Level Of Caution

The degree of care and attention to potential risks or dangers in a particular situation or activity.

Negligence Per Se

A legal doctrine where an act is considered negligently wrongful because it violates a statute or regulation.

Legal Rule

A binding principle or procedure that is enforced by a legal authority, guiding or regulating behaviors or processes.

Unforeseeable Harm

Harm or injury that could not have been anticipated or expected under normal circumstances or with reasonable foresight.