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Rosa Purchased Three Call Option Contracts on ABC Stock with a Strike

question 49

Multiple Choice

Rosa purchased three call option contracts on ABC stock with a strike price of $27.50 when the option was quoted at $1.10 per share. The option expires today when the value of ABC stock is $29.30. Ignoring trading costs and taxes, what is the net profit on this investment?


Definitions:

Mean

The average of a set of numbers, calculated by summing all the numbers and then dividing by the count of those numbers.

Frequency Distribution

A summary of data showing how often each value occurs.

Mean

The average value obtained by dividing the sum of all values in a data set by the number of values.

Set of Data

An assembly of quantitative or qualitative values gathered for analysis or observation.

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