You Purchased a Call Option with a $17

question 57

Multiple Choice

You purchased a call option with a $17.35 strike price and a call premium of $.30. On the expiration date, the underlying stock was priced at $18.55 per share. What is the percentage return on your investment?

• A)−100%
• B)0%
• C)125%
• D)200%
• E)300%

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Definitions:

Subsidizing

The act of providing financial support by the government to lower the cost of producing goods or services, often to encourage production or consumption.

External Benefit

A positive effect or advantage that extends beyond the direct parties involved in a transaction, affecting others who are not directly involved.

Childhood Vaccinations

Immunization shots given to children to protect them from serious diseases by building immunity.

Direct Regulation

involves government interventions that directly restrict or control the activities, decisions, or characteristics of enterprises.