Josh Owns 2 Call Options on Foster Glass Stock

question 63

Multiple Choice

Josh owns 2 call options on Foster Glass stock. The exercise price is $47.50 and the stock price at expiration is $49.01. What is the total payoff on the option contracts?

• A)$0
• B)−$3.02
• C)$3.02
• D)$30.20
• E)$302.00

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Definitions:

Extortion

The act of obtaining something, especially money, through force or threats.

Preexisting Duty

Preexisting Duty is a legal principle stating that an action or service required by an existing contract cannot serve as consideration for a new contract.

Promissory Estoppel

A doctrine that applies when a promisor makes a clear and definite promise on which the promisee justifiably relies. Such a promise is binding if justice will be better served by the enforcement of the promise.

Promisor

An individual or entity that makes a promise to perform an act or fulfill an obligation as specified in a contract.