Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 1 2 points Save Answer Which of the following most accurately describes an example of profiting from purchase of a put option O A.

image text in transcribed

QUESTION 1 2 points Save Answer Which of the following most accurately describes an example of "profiting from purchase of a put option O A. The purchaser of a put option pays a "premium" for a contract to have the obligation, to sell a specific number of shares at an agreed- upon strike price. For example, you might buy a "put" giving you the obligation to sell shares at $300 per share for the next 18 months. The amount you would pay for the put option contract is the premium. If the stock drops below $300, say down to $200, you have the obligation to sell shares at $300, which cost $200. And you profit! OB. The purchaser of a put option pays a "premium* for a contract to have the "right", but not the obligation, to buy a specific number of shares at an agreed-upon strike price. For example, you might buy a "put giving you the right to buy shares at $300 per share for the next 18 months. The amount you would pay for the put option contract is the premium. If the stock goes above $300, say up to $400. you have the right to buy shares at $300, and sell them at the market price of $400. And you profit! OC. The purchaser of a put option pays a "premium" for a contract to have the "right", but not the obligation, to sell a specific number of shares at an agreed-upon strike price. For example, you might buy a "put" giving you the right to sell shares at $300 per share for the next 18 months. The amount you would pay for the put option contract is the premium. If the stock drops below $300, say down to $200, you have the right to sell shares at $300 which cost $200.. And you profit! OD. The purchaser of a put option pays a "premium" for a contract to have the obligation, to buy a specific number of shares at an agreed- upon strike price. For example, you might buy a "put" giving you the obligation to buy shares at $300 per share for the next 18 months. The amount you would pay for the put option contract is the premium. If the stock goes above $300, say up to $400, you have the obligation to buy shares at $300, which you are most happy to do since they are worth $400. And you profit! QUESTION 2 2 points Save Answer Which of the following most accurately identifies the changes in prices of Bitcoin in the time periods mentioned? O A 1/10/20 $8,087 1/10/21 $38,709 Gain Plus 478% OB. 4/16/21 $62,926 7/20/21 $9,600 Loss Minus 85% O C. 1/10/21. $38,709 8/22/21 $9,615 Loss Minus 75% O D.2/13/20 $10,218 3/16/20 $1.944 Loss Minus 81%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

10th Edition

1119491630, 978-1119491637, 978-0470534793

More Books

Students also viewed these Accounting questions