Grant Purchased One Call on XYZ Stock at an Exercise

question 64

Multiple Choice

Grant purchased one call on XYZ stock at an exercise price of $25. The market price of XYZ stock when Grant purchased the call was $24 a share. XYZ is currently priced at $30 a share. Grant paid $120 to buy the call. How much profit will Grant make if he exercises the option today and then sells the shares? Ignore all transaction-related costs.

• A) $380
• B) $480
• C) $500
• D) $600

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Definitions:

Pros and Cons

The advantages (pros) and disadvantages (cons) of a specific decision, situation, or argument.

Ambiguous Intentions

Unclear or doubtful aims or objectives, often leading to uncertainty or confusion in interpretation.

Aggressive Boys

Typically refers to male children who exhibit behaviors characterized by physical or verbal force, which may be seen in contexts such as play, interactions with peers, or in response to frustration.

Hostile Actions

Behaviors or actions that are aggressive and intended to harm or assert dominance over someone else.