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:

Binary Search

An efficient algorithm for finding an item from a sorted list of items, by repeatedly dividing in half the portion of the list that could contain the item.

Sorted List

A list that maintains its elements in a sorted order, either ascending or descending, making it efficient for operations like searching.

Maximum Comparisons

The term usually refers to the highest number of comparisons required to complete an operation, often used in the context of sorting and searching algorithms.

Binary Search

A searching algorithm that finds the position of a target value within a sorted array by repeatedly dividing in half the portion of the list that could contain the target value.