Last Week, You Purchased a Call Option on Rosewood Stock

question 398

Multiple Choice

Last week, you purchased a call option on Rosewood stock at an option price of $6.80. The stock price last week was $34.50. The strike price is $40. What is the intrinsic value of your investment if Rosewood is currently priced at $38.75?

• A) -$805
• B) -$555
• C) -$125
• D) $0
• E) $125

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Definitions:

Agricultural Revolution

denotes a period of significant agricultural development and innovation, leading to increased productivity and societal transformation.

Industrial Revolution

A period of significant industrial growth and technological innovation, beginning in the late 18th century, that transformed primarily agrarian societies into industrial ones.

Postindustrial Revolution

The postindustrial revolution describes the shift from manufacturing-based economies to ones primarily focused on services, information, and technology, signaling changes in workforce demands and economic structures.

Social Barriers

Obstacles that exist within societies which prevent individuals or groups from achieving equal status or access to resources and opportunities.