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SIE: Options
SIE practice questionhardMax gain/loss calculations

A long put with a $25 strike is purchased for $2. What is the maximum gain per share?

  1. AUnlimited
  2. B$27
  3. C$2
  4. D$23✓ Correct answer
Explanation

Why D$23

Max gain is strike minus premium ($25-$2=$23). Unlimited gain is not possible for puts, C is max loss.

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