You Purchase a Call Option on Dollars for a Premium

question 82

Multiple Choice

You purchase a call option on dollars for a premium of £0.02 per unit, with an exercise price of £0.57; the option will not be exercised until the expiration date, if at all. If the spot rate on the expiration date is £0.58, your net profit per unit is:

• A) £0.00.
• B) -£0.02.
• C) -£0.01.
• D) £0.02.
• E) none of the above

Understand the key differences and similarities between GAAP and IFRS.

Mastery of adjusting entries for prepaid expenses, accrued expenses, depreciation, and unearned revenue.

Comprehend the concepts of income and expense recognition under IFRS and GAAP.

Gain proficiency in preparing financial statements from adjusted trial balances.

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Definitions:

LLC

Abbreviation for Limited Liability Company, a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Transferable Interest

The portion of a member's ownership in a limited liability company (LLC) that can be transferred or sold to other parties, typically including the right to receive financial distributions.

Default

Failure to fulfill a legal obligation, especially failure to pay a debt on time.

Profit Share

This refers to a portion of a company's profits allocated to its employees, shareholders, or partners as a form of incentive or bonus.