Assume you purchased the right to sell 2,900 shares of JCPenney stock in November 2015 at a strike price of $7.00 per share. Suppose the stock sells for $6.50 per share immediately before your options expiration. What is the rate of return on your investment? What is your rate of return if the stock sells for $8.00 per share? Assume your holding period for this investment is exactly three months.

November 27, 2015 nThe Money Straddle Lookup Option Strike Fiter 8.00 9.00 9.50 10.00 10.50 11.00 Contract Name Bid 1.79 1.00 0.69 0.44 0.26 0.15 1.89 1.10 0.78 0.48 0.29 0.18 0.00 0.00 0.00 0.00 0.03 0.01 000% 0.00% 0.00% 000% 12 00% -5.88% 56 45% 51.95% 500096 45.12% 43.75% 44 34% 20 JCP151127C00008000 JCP151127C00009000 0 JCP151127C00009500 0.74 JCP151127C00010000 JCP151127Co0010500 0.28 JCP151127C00011000 1.62 12 0.98 13 24 19 51 50 105 47 41 0.40 0.16 Strike Fiter 7.00 8.50 9.00 9.50 Contract Name Bid JCP151127P00007000 JCP151127P00008500 0 JCP151127P00009000 0.41 JCP151127P00009500 0.65 0.03 0.18 0.29 0.47 0.08 0.21 0.33 0.50 0.00 0.00 0.00 0.00 0.00% 000% 0.00% 0.00% 67 5896 53 13% 5020% 49 22% 0.06 24 24 0.31 10 10 32 83