Essay
A put option is purchased for a premium of $200 with an exercise price of $38 per share and a current market price on the stock of $41 per share.What would be the return if the market price declines to $35 per share and the stock is purchased and the option exercised? Ignore taxes and brokerage commissions.Round to the nearest percentage if necessary.
(a)9 percent
(b)15 percent
(c)50 percent
(d)100 percent
Correct Answer:
Verified
Correct Answer:
Verified
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