If S Is the Stock Price on an Option's Expiration

question 17

Multiple Choice

If S is the stock price on an option's expiration date and K is the strike price,then a put seller's (writer's) payoff at expiration is:

• A) max(0,S - K)
• B) min(0,K - S)
• C) max(0,K - S)
• D) min(0,S - K)
• E) None of these answers is correct.

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Definitions:

Body Cavities

Defined spaces within the body that house organs and other structures, such as the thoracic, abdominal, and pelvic cavities.

Mesentery

A double layer of peritoneum that attaches the intestines to the wall of the abdomen, providing support and containing blood vessels, nerves, and lymphatics.

Serous Membrane

A thin membrane that lines certain internal cavities, producing serous fluid to reduce friction between internal organs.

Abdominal Organs

The organs within the abdominal cavity, including the stomach, liver, gallbladder, pancreas, intestines, and kidneys.