You Bought Nine Call Option Contracts with a Strike Price

question 36

Multiple Choice

You bought nine call option contracts with a strike price of $25.00 and a premium of $.50. At expiration, the stock was selling for $23.75 a share. What is the total profit or loss on your option position if you did not exercise it prior to the expiration date?

• A)−$9.24
• B)−$10.20
• C)$0
• D)−$270
• E)−$450

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Definitions:

Authority Figure

An individual recognized or perceived as being in a position of power, who commands influence or respect.

Prestige

The respect, admiration, or perceived social status that a person, organization, or concept holds.

Milgram Study

A series of social psychology experiments conducted by Stanley Milgram, which aimed to measure the willingness of participants to obey an authority figure who instructed them to perform acts conflicting with their personal conscience.

Obedience

The act of following orders or complying with instructions, rules, or laws imposed by authorities.