You Sold a Put Contract on EDF Stock at an Option

question 16

Multiple Choice

You sold a put contract on EDF stock at an option price of $.50. The option had an exercise price of $21. The option was exercised. Today,EDF stock is selling for $20 a share. What is your total profit or loss on all of your transactions related to EDF stock assuming that you close out your positions in this stock today? Ignore transaction costs and taxes.

• A) -$150
• B) -$60
• C) -$50
• D) $60
• E) $150

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Definitions:

Legislation

Laws and regulations enacted by a government body to dictate the behavior of individuals, businesses, and other organizations.

Economic Inefficiency

A situation where resources are not allocated optimally, leading to waste or lost potential output.

Political Process

The set of activities associated with making decisions in groups or other forms of power relations between individuals, such as government policy-making.

Efficient Projects

Projects that are executed in such a manner that maximizes output or benefits with the least input or resources, often aligned with the goals of cost-effectiveness and sustainability.