Should exercise the option at expiration

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In July, you purchase a September 75 put option on Keebler, Inc. common stock. You:

Question A) Have given the seller the right to buy a share of Keebler stock at $75 sometime prior to the September expiration.

Question B) Will have a negative cash flow at the time you initiate the contract and a positive cash flow when the option expires if the stock price is less than $75 at that time.

Question C) Have the right to buy a share of Keebler stock at $75 sometime prior to the September expiration.

Question D) Should exercise the option at expiration if the price of Keebler stock is $80.

Question E) Will have a worthless option in August if the stock price is $80 at that time.

Reference no: EM132588988

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