Suppose You Have Sold a Put Option on a Stock

question 23

True/False

Suppose you have sold a put option on a stock with a strike price of $25. If the stock price at expiration is $30, your payoff will be $-5.

---

Definitions:

Reciprocal Services

Refers to the mutual exchange of services between departments within an organization to support each other's operations.

Direct Method

A costing method that directly allocates service department costs to producing departments without considering services provided between service departments.

Personnel Department

The division of a business that is focused on activities related to employees, including hiring, training, and benefits management.

Cost Allocated

The process of distributing expenses in multiple cost centers or accounts based on certain criteria or methodologies.