You Purchased Four Call Option Contracts with a Strike Price

question 19

Multiple Choice

You purchased four call option contracts with a strike price of $40 and an option premium of $1.25. You closed your contract on the expiration date when the stock was selling for $42.50 a share. What is your total profit or loss on your option position?

• A)−$50
• B)−$10
• C)$135
• D)$385
• E)$500

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Definitions:

Central Government

The national government, as opposed to state or local governments, responsible for managing affairs that affect the country as a whole.

Antifederalist

Individuals who opposed the creation of a stronger U.S. federal government and the ratification of the Constitution in 1787-88, preferring more power to be held by state governments.

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An advocate or supporter of federalism, particularly referring to those who supported the ratification of the U.S. Constitution in the late 18th century.

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