Schweser volume 1 exam 2 morning session question 43. I think the answer is wrong. The expected loss using Dec 38 put should be ((41.28-38.8)+3.62))*140000. But the answer is ((41.28-38)+3.62))*140000. If the expected stock price is 38.8, the 38 put would not be exercised. Why subtract 38?
This one has been mentioned a couple times on the forums already. Poor wording on part of Kaplan
Sorry, I did not check the forum. What is wrong?
Thank you. It should say the max loss not expected loss.