Three Months Back You Bought for $4 a Put Option

Three months back you bought for $4 a put option on a stock with an exercise price of $100.If the stock price at expiration of this option is $92, what is your return on investment?

A) 200 percent
B) 150 percent
C) 100 percent
D) 50 percent Proceeds = Stock price - Exercise price
100 - 92 = $8
Profits = proceeds - original investment
= 8 - 4 = $4

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free