Bob's DJIA Index Call Option Had a Strike Price of 261

question 122

Multiple Choice

Bob's DJIA Index call option had a strike price of 261. When he exercised the option, the Dow was at 26,350.

• A) Bob received $2,500 from the writer of the contract.
• B) Bob paid $250 to the writer of the contract.
• C) Bob received $250 from the writer of the contract.
• D) Bob paid $2,500 to the writer of the contract.

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Definitions:

Drug Doses

The specified quantities of medication to be taken at particular times to treat or prevent illness.

Critical Judgment

The capacity to assess situations or problems carefully and to make well-reasoned evaluations or judgements.

Inhibition

The process of restraining or decreasing the likelihood of a behavior or action, often used in the context of neurological and psychological responses.

Impulsive Behavior

Actions performed without forethought or consideration of the consequences, often driven by immediate desires or emotions.