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NEW QUESTION: 1
In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35
strike price and a July expiration for a premium of $600. If the option expires without being exercised, how
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A. $600 is added to his acquisition cost for the stock
B. $600 is held in abeyance until the stock is eventually sold
C. as a $600 capital gain
D. as a $600 capital loss
Answer: D
Explanation:
a $600 capital loss. The amount of premium paid is the cost and the recovery is zero,
resulting in a $600 capital loss.
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