Cara Wrote a Put Option Contract on EZ Stock with an Exercise

Cara wrote a put option contract on EZ stock with an exercise price of $40 per share and an option price of $.65 per share. Today, the contracts expire and the stock is selling for $34.30 a share. What is the net profit on this investment? Ignore trading costs and taxes.

A) −$635.00
B) $50.50
C) $635.00
D) $63.50
E) −$505.00

Correct Answer:

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