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The Seller of a Put Option on 100 Shares of Stock

Question 16

Multiple Choice

The seller of a put option on 100 shares of stock makes the most profit when the


A) option is exercised immediately.
B) stock price exceeds the exercise price throughout the option period.
C) exercise price exceeds the stock price throughout the option period.
D) option is converted into shares.
E) is not exercised until the expiration date.

Correct Answer:

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