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All main topics / Finance & Investment / Derivatives / Derivatives
17.The price of a stock is $64. A trader buys 1 put option contract on the stock with a strike price of $60 when the option price is $10. When does the trader make a profit?
A.When the stock price is below $60
B.When the stock price is below $64
C.When the stock price is below $54
D.When the stock price is below $50
Answer: D
The payoff must be more than the $10 paid for the option. The stock price must therefore be below $50.
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Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015




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