In January, JB Stock Was Selling for $50 Per Share

question 16

Multiple Choice

In January, JB stock was selling for $50 per share. When the calls and the puts with a strike price of $45 expired on March 20, JB was selling at $46. Which investors made a profit?
I. the writer of the call
II. the buyer of the call
III. the writer of the put
IV. the buyer of the put

• A) II and III
• B) I and III
• C) only III
• D) II and IV

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Definitions:

Geologic Hazards

Natural events caused by geological processes, such as earthquakes, landslides, and volcanic eruptions, that can potentially endanger human lives and property.

Volcanic Eruptions

Explosive events where magma, gas, and ash are expelled from a volcano, often with significant force and impact on the surrounding environment.

Flash Flooding

Rapid and extreme flow of high water into a normally dry area, or a rapid water level rise in a stream or creek above a predetermined flood stage, often caused by intense rainfall.

Mountain Ranges

Chains or clusters of mountains that are close together in a line or a group, often formed by tectonic forces or volcanism.