Ahmad Bought Put Options on Home Depot with a Strike

question 36

Multiple Choice

Ahmad bought put options on Home Depot with a strike price of $130. The option premium was $2.83. Just before the contract expired, Home Depot stock was at $132.83 per share. Ahmad

• A) made a profit of $2.83 per share.
• B) lost $2.83 per share because the option would not be exercised.
• C) lost $1.5.66 per share.
• D) made a profit of $5.66 per share.

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Definitions:

Carboxyl

A carboxyl group is a functional group consisting of a carbon atom double-bonded to an oxygen atom and also bonded to a hydroxyl group, symbolized as -COOH.

Sulfhydryl

A functional group consisting of a sulfur atom bonded to a hydrogen atom (-SH), important in the structure and function of proteins.

ATP

Adenosine triphosphate, a molecule that carries energy within cells for metabolism.

Energy Currency

ATP (adenosine triphosphate), a molecule that stores and transfers energy within cells, making it possible for cells to perform their functions.