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13) The price of a stock on February 1 is $124. A trader sells 200 put options on the stock with a strike price of

13) The price of a stock on February 1 is $124. A trader sells 200 put options on the stock with a

strike price of $120 when the option price is $5. The options are exercised when the stock price

is $110. The trader's net profit or loss is

A) Gain of $1,000

B) Loss of $2,000

C) Loss of $2,800

D) Loss of $1,000

Answer: D

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