HHM & Co., is a famous consultant. It has established the following strategy on the stock of PLS Ltd: (a) Purchased one 3-month call option with…

CA Final · Advanced Financial Management · PYQS · September 2025
HHM & Co., is a famous consultant. It has established the following strategy on the stock of PLS Ltd: (a) Purchased one 3-month call option with a premium of 25and an exercise price of 750. (b) Purchased one 3-month put option with a premium of 8and an exercise price of 600. The stock of PLS Ltd is currently selling at 680. The option size is 100 shares of PLS Ltd. From the information given above, choose the correct answer to the following question No. 7 to 9:
(A) Net loss of 3,300
(B) Net gain of 3,300
(C) Net gain of 6,700
(D) Net loss of 6,700

Suggested Answer and Working Notes:

Correct Answer: Option (A)

Net loss of 3,300

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