You own 100 shares of Deltona stock which is currently worth $43 a share.You just paid an option premium of $0.85 to buy one put contract 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)$40.85
C)$42.15
D)$43.00
E)$43.85

Question

Quizplus · Accepted Answer

Maximum loss = Strike price = $40 a share

You Own 100 Shares of Deltona Stock Which Is Currently