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The Market Price of Wild Ride Stock Has Been Very

Question 54

Multiple Choice

The market price of Wild Ride stock has been very volatile and you think this volatility will continue for a few weeks.Thus,you decide to purchase a 1-month call option contract with a strike price of $20 and an option price of $1.65.You also purchase a 1-month put option on the stock with a strike price of $20 and an option price of $.95.What will be your total profit or loss on all the transactions related to these option positions if the stock price is $15.40 on the day the options expire?


A) $365
B) $0
C) -$260
D) $200
E) $105

Correct Answer:

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