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An Investor Purchased a Share of Stock for $42 and at the Same

Question 20

Multiple Choice

An investor purchased a share of stock for $42 and at the same time paid $2 to purchase a put option on the stock with an exercise price of $40.What is her profit if the stock is worth $30 at expiration?


A) $6
B) −$6
C) −$4
D) $4

Correct Answer:

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