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Corporate Finance · End Term · 22 Dec 2024 · September 2024 term · Set QDB3

Question 21: The price of a stock is Rs 84. A trader buys a put optio…

Question 21

+3 marksOne correct option

The price of a stock is Rs 84. A trader buys a put option on the stock with a strike price of Rs 80 when the option price is Rs 10. When does the trader make a profit?

  1. A

    When the stock price is below Rs 90

  2. B

    When the stock price is below Rs 84

  3. C

    When the stock price is below Rs 77

  4. D

    When the stock price is below Rs 74

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Correct answer

  • D

    When the stock price is below Rs 74

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Question 21 of 35 in the IIT Madras BS Corporate Finance (Corporate Finance) End Term paper sat on 22 Dec 2024, in the September 2024 term (IIT M DEGREE AN EXAM QDB3 22 Dec 2024). It carries 3 marks.

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