Suppose That You Purchased a Call Option on the S&P

question 89

Multiple Choice

Suppose that you purchased a call option on the S&P 100 Index. The option has an exercise price of 1,700, and the index is now at 1,760. What will happen when you exercise the option?

• A) You will have to pay $6,000.
• B) You will receive $6,000.
• C) You will receive $1,700.
• D) You will receive $1,760.
• E) You will have to pay $7,000.

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Definitions:

Probabilities

The indication of how likely an event is to come to pass, given as a figure from 0 to 1.

Sample Proportion

The fraction or percentage of a sample that exhibits a particular attribute or characteristic.

Probability

A measure of the likelihood that an event will occur, ranging from 0 (impossibility) to 1 (certainty).

Population Proportion

The fraction of the population that holds a particular trait, attribute, or characteristic of interest.