A Call Option on 100 Shares of Stock Is Purchased

question 84

Multiple Choice

A call option on 100 shares of stock is purchased for a premium of $400. The current price of the stock is $42 per share, and the exercise price is $44 per share. The option is exercised when the stock is selling for $50 per share. What would be your return on the option if after exercising it, you immediately sold the stock at the market price of $50 per share? Ignore taxes and brokerage commissions.

• A) 8%
• B) 12%
• C) 50%
• D) 200%

Comprehend the protections offered by the Lanham Act against deceptive use of trademarks.

Know the requirements for online advertisements and disclosures.

Understand the application of federal and state consumer protection laws.

Identify the legal requirements for food and product safety standards.

---

Definitions:

Expression

A combination of numbers, symbols, and operations used to represent a value, without an equivalence relation.

Simplify

The process of rendering an algebraic expression into its simplest form, making it easier to understand or solve.

Expression

A mix of numbers and symbols that signifies a math-based amount or connection.

X

Often used as a variable or unknown value in mathematics.