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Steve bought 300 shares of stock at a price of $20 per share. The price of the stock then went up to ...

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Steve bought 300 shares of stock at a price of $20 per share. The price of the stock then went up to ...

Steve bought 300 shares of stock at a price of $20 per share. The price of the stock then went up to $33 per share so Steve decided to hedge his position by purchasing 3 puts at a cost of $120 each. The puts have an exercise price of 30. One week prior to the expiration of the puts, the price of the stock was at $22 per share. If Steve closed out all of his positions at that time, he would have earned a net profit of

▸ $200.

▸ $240.

▸ $2,640.

▸ $3,000.

Textbook

Fundamentals of Investing

Edition: 14^th

Authors: Zutter, Smart

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