Problemthree months ago central supply stock was selling, Ask an Expert

Accounting

Problem:

Three months ago, Central Supply stock was selling for $51.40 a share. At that time, you purchased five put options on the stock with a strike price of $52 per share and an option price of $0.60 per share. The option expires today when the value of the stock is $42.70 per share.

Required:

Question: What is your net profit or loss on this investment? Ignore trading costs and taxes.

Note: Show all workings.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91169976

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