Suppose the Price of a Share of Google Stock Is

question 83

Multiple Choice

Suppose the price of a share of Google stock is $500.An April call option on Google stock has a premium of $5 and an exercise price of $500.Ignoring commissions, the holder of the call option will earn a profit if the price of the share

• A)increases to $504.
• B)decreases to $490.
• C)increases to $506.
• D)decreases to $496.

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Definitions:

Transfer of Ownership

The legal process by which the title of a property or asset is moved from one party to another.

Franchise

A business model where one party (the franchisor) grants another party (the franchisee) the rights to use its trademark and business systems and processes to produce and market goods or services according to certain specifications.

Partnership

A legal form of business operation between two or more individuals who share management and profits.

Termination Provisions

Clauses within contracts that detail the conditions under which the agreement may be ended by either or both parties.