Three months ago you bought a put option with an exercise price of $100 and a premium of $4. If the stock price at expiration of this option is $92, what is your return on investment?
A) -100%
B) -50%
C) 100%
D)50%

Name: Three months ago you bought a put option with an exercise price of $100 and a premium of $4. If the stock price at expiration of this option is $92, what is your return on investment? A) -100% B) -50% C) 100% D)50%
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Question

Quizplus · Accepted Answer

% return = ($100 - 4 - 92)/$4 = 1, or 100%

Three Months Ago You Bought a Put Option with an Exercise