The price of a stock on February 1 is 84 A trader buys 200 put options on the

# The price of a stock on february 1 is 84 a trader

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8.The price of a stock on February 1 is \$84. A trader buys 200 put options on the stock with a strike price of \$90 when the option price is \$10. The options are exercised when the stock price is \$85. The trader’s net profit or loss is A.Loss of \$1,000 B.Loss of \$2,000 C.Gain of \$200 D.Gain of \$1000 E.Loss of \$4000 9.The price of a stock on February 1 is \$48. A trader sells 200 put options on the stock with a strike price of \$40 when the option price is \$2. The options are exercised when the stock price is \$39. The trader’s net profit or loss is 10.Which of the following describes a call option?
3 11.The price of a stock is \$67. A trader sells 5 put option contracts on the stock with a strike price of \$70 when the option price is \$4. The options are exercised when the stock price is \$69. What is the trader’s net profit or loss? 12.Consider a put option and a call option with the same strike price and time to maturity. Which of the following is true? A.It is possible for both options to be in the money B.It is possible for both options to be out of the money C.One of the options must be in the money D.One of the options must be either in the money or at the money E.All of the above 13.When the stock price increases with all else remaining the same, which of the following is true? 14.When the strike price increases with all else remaining the same, which of the following is true? 15.When volatility increases with all else remaining the same, which of the following is true?

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