Mr. A bought a put option of 6 months for a price of $50. The strike price is $150. At the end of 6 months, the stock is selling for a price of $180. Calculate the profit/loss from the option. A. Profit of S30 B. Loss of $20 C. Loss of $50 D. Profit of S50

Mr. A bought a put option of 6 months for a price of $50. The strike price is $150. At the end of 6 months, the stock is selling for a price of $180. Calculate the profit/loss from the option. A. Profit of S30 B. Loss of $20 C. Loss of $50 D. Profit of S50

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Mr. A bought a put option of 6 months for a price of $50. The strike price is $150. At the
end of 6 months, the stock is selling for a price of $180. Calculate the profit/loss from the
option.
A. Profit of S30
B. Loss of $20
C. Loss of $50
D. Profit of $50

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