You own 300 shares of Delta stock which is currently worth $42 a share.You just paid an option premium of $0.70 to buy three put contracts on this stock with a strike price of $40.What is the maximum loss per share you are avoiding by purchasing the option contract?
A) $40.00
B) $42.85
C) $44.15
D) $47.00
E) $53.85

Question

Quizplus · Accepted Answer

Maximum loss = Strike price = $40 a share

You Own 300 Shares of Delta Stock Which Is Currently