Katie Purchased 6 Call Options on Atlas Co

question 33

Multiple Choice

Katie purchased 6 call options on Atlas Co. stock with a strike price of $40. On the expiration date, the stock was priced at $38.95 a share. What is the total payoff on the option contracts?

• A)−$220.00
• B)−$55.00
• C)$0
• D)$2.20
• E)$55.00

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Definitions:

Division

The arithmetic operation of dividing one quantity by another, resulting in a quotient and sometimes a remainder.

Multiplication

An arithmetic process that involves multiplying two numbers to achieve their resultant multiplication.

Evaluate

To determine or calculate the value of something.

Exponentiation

The mathematical operation involving the raising of one number to the power of another.