Caroline pays 15% taxes on dividends and capital gains and 35% taxes on ordinary income. three years ago, she purchased 100 shares of xyz, inc. for $70. in january, caroline wrote a six month put option on the stock at an exercise price of $90 and received $500. three days after the purchase, the price of xyz dropped significantly and has not been above $80 since. the result is that the put buyer chose not to exercise her put. ignoring commissions, caroline’s tax on this transaction is
a. $ 75b. $175
c. $225d. $325e. $650