USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 85

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 16.8. If XYZ were trading at $90/share and you formed a bull money spread, what is your profit if XYZ is trading at $110 at expiration?

• A) $912.50 loss
• B) $87.50 gain
• C) $87.50 loss
• D) $1,000.00 gain
• E) $1,000.00 loss

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Definitions:

Misdirected Payment

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Bankruptcy

A lawful method that enables individuals or enterprises in financial distress to pursue exemption from part or all of their financial liabilities.

Shelter Principle

A legal concept in property law that allows a person who purchases goods from a non-owner to acquire valid title under certain conditions, provided the seller had derivative authority to sell.

Holder-In-Due-Course Doctrine

A principle in commercial law that protects a purchaser of a negotiable instrument who takes it for value, in good faith, and without notice of any defect.