Exhibit 13-3
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

Multiple Choice

Exhibit 13-3
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)
On the last day of October, Bruce Springsteen is considering the purchase of 100 shares of Olivia Corporation common stock selling at $37 1/2 per share and also considering an Olivia option. $\begin{array}{lllll}&\quad\quad\quad\text { Calls } && \quad\quad\quad\quad\text { Puts }\\\hline\text { Price } & \text { December } & \text { March } & \text { December } & \text { March } \\\hline 35 & 33 / 4 & 5 & 11 / 4 & 2 \\40 & 21 / 2 & 31 / 2 & 41 / 2 & 43 / 4\end{array}$
-Refer to Exhibit 13-3. If Bruce buys a March put option with an exercise price of 40, what is his dollar gain (loss) if he closes his position when the stock is selling at 43 1/2?

A) $825.00 loss
B) $475.00 loss
C) $350.00 loss
D) $25.00 loss
E) He has a gain