What Is the Cost of fiVe November 25 Call Option

question 83

Multiple Choice

What is the cost of five November 25 call option contracts on KNJ given the following price quotes?
KNJ (KNJ) Underlying share price: 30.86 $$\begin{array} { | l | l | l | l | } \hline & & \text { Call } & \text { Put } \\\hline \text { Expiration } & \text { Strike } & \text { Last } & \text { Last } \\\hline \text { Aug } & 25 & 6.15 & .05 \\\hline \text { Nov } & 25 & 6.60 & 10 \\\hline \text { Aug } & 35 & 10 & 4.60 \\\hline \text { Nov } & 35 & 70 & 5.10 \\\hline\end{array}$$

• A)€615
• B)€660
• C)€2,500
• D)€3,075
• E)€3,300

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Definitions:

Units

The basic quantitative measure used in accounting to represent transactions or balances, often referring to production or sales volumes.

Gross Profit

The difference between revenue and the cost of goods sold before deducting overheads, payroll, taxation, and interest payments.

LIFO

Last In, First Out, an inventory valuation method where the goods purchased or produced last are the first to be expensed.

Tax Rate

The percentage at which an individual or corporation is taxed.