You Own Two Call Option Contracts on ABC with a Strike

question 56

Multiple Choice

You own two call option contracts on ABC with a strike price of €15.When you purchased the shares the option price was €1.20 and the share price was €15.90.What is the total intrinsic value of
These options if ABC is currently selling for €14.50 a share?

• A)-€280
• B)-€180
• C)-€100
• D)€0
• E)€100

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Definitions:

Minimum Cash Balance

The lowest amount of cash that a company or individual aims to hold in order to meet short-term obligations.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, helping organizations manage their liquidity and cash reserves.

Management Use

Management use typically refers to information or resources utilized by the management team for decision-making and strategic planning purposes.

June Cash Budget

A financial plan that estimates the cash inflows and outflows for a business during the month of June, aiding in managing liquidity.