Hall, Inc, Enters into a Call Option Contract with Bennett Investment

question 3

Multiple Choice

Hall, Inc., enters into a call option contract with Bennett Investment Co. on January 2, 2011. This contract gives Hall the option to purchase 1,000 shares of WSM stock at $100 per share. The option expires on April 30, 2011. WSM shares are trading at $100 per share on January 2, 2011, at which time Hall pays $400 for the call option. The $400 paid by Hall, Inc., to Bennett Investment is referred to as the

• A) option premium.
• B) notional amount.
• C) strike price.
• D) intrinsic value.

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Definitions:

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A secondary education level that provides foundational knowledge and skills, typically completed by adolescents.

External Environment

The outside factors and influences that can affect an organization's performance, including economic, technological, legal, and socio-cultural elements.

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The elements, circumstances, occasions, and aspects inside an organization that affect its operations and decisions.

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