You Wrote Ten Call Option Contracts on JIG with a Strike

question 17

Multiple Choice

You wrote ten call option contracts on JIG with a strike price of €40 and an option price of €.40. What is your net gain or loss on this investment if the price of JIG is €46.05 on the option expiration
Date?

• A)-€6,450
• B)-€5,650
• C)€400
• D)€5,650
• E)€6,450

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Definitions:

Common Resource

A shared resource that multiple parties can access and use, which often leads to overuse and depletion due to a lack of exclusive ownership.

Positive Externality

A benefit that affects a party who did not choose to incur that benefit, often associated with public goods or services that extend beyond the direct participants in an economic activity.

Rival in Consumption

Refers to a situation where the consumption of a good by one individual prevents or diminishes its consumption by another.

Club Goods

Goods that are excludable but non-rivalrous, meaning they can be accessed by members of a specific group but one person's use does not diminish availability for others.