You Have a Long Position in a Stock That You

question 10

Multiple Choice

You have a long position in a stock that you purchased for $100, and a short position in a put option on the same stock at strike K = 100. At maturity the stock price is $95, and you liquidate your stock and option positions. Your gross payoff (cash flow) is

• A) $0
• B) $5
• C) $90
• D) $95

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Definitions:

Direct Labor-Hours

The total hours worked by employees that are directly involved in the manufacturing process.

Raw Materials Cost

The expense of materials that are used in the manufacturing process to create goods, not yet processed or altered.

Direct Labor Wage

The remuneration paid to employees who are directly involved in the production of goods or the provision of services.

Budgeted Cash Balance

An estimated amount of cash a company expects to have on hand at the end of a specified period, based on anticipated inflows and outflows.