The below figure shows the profits to be made when buying a put option. If the...
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The below figure shows the profits to be made when buying a put option. If the spot (market) price of the PEP stock is $70 at the expiration date of the put with exercise price of 75, would the put option be exercised and what will be the loss/gain for the option holder? Profit and Loss 2 1 0 70 -1 -2 -3 -4 Profit and Loss of Buying a PEP Put 70 71 78 73 74 75 76 77 78 79 80 + + Stock Prices at Expiration (ST) Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the put will be exercised and the holder will make $75-70 minus the cost of the put. b the put will not be exercised and the holder will not lose anything the put will be exercised and the holder will only lose the cost of the put option d the put will be exercised and the holder will make $5 per stock only e none of the above The below figure shows the profits to be made when buying a put option. If the spot (market) price of the PEP stock is $70 at the expiration date of the put with exercise price of 75, would the put option be exercised and what will be the loss/gain for the option holder? Profit and Loss 2 1 0 70 -1 -2 -3 -4 Profit and Loss of Buying a PEP Put 70 71 78 73 74 75 76 77 78 79 80 + + Stock Prices at Expiration (ST) Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the put will be exercised and the holder will make $75-70 minus the cost of the put. b the put will not be exercised and the holder will not lose anything the put will be exercised and the holder will only lose the cost of the put option d the put will be exercised and the holder will make $5 per stock only e none of the above
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