You Sold (Wrote) Five TWX Call Option Contracts with a Strike

question 232

Multiple Choice

You sold (wrote) five TWX call option contracts with a strike price of $40 when the option was quoted at $3.20. The option expires today when the value of TWX stock is $38.15. Ignoring trading costs and taxes, what is the total profit or loss on your investment?

• A) -$1,600
• B) -$675
• C) $0
• D) $500
• E) $1,600

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