An Investor Purchases a Call Option in a Stock That

question 70

Multiple Choice

An investor purchases a call option in a stock that is currently selling for $50 per share on January 3, 2016. He pays $6 per share for the option with an exercise price of $57 and an expiration date of April 17, 2016. On April 16, 2016 the stock is selling for $58 and the investor exercises the option and immediately sells the stock. How much total gain or loss did the investor realize?

• A) - $500
• B) $100
• C) Breakeven
• D) $700

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Definitions:

Hypomania

A milder form of mania, characterized by elevated or irritable mood, increased activity or energy levels, but not severe enough to cause significant impairment.

Depression

A common mental disorder characterized by persistent sadness, loss of interest, and a lack of energy or drive, often accompanied by physical symptoms.

Rapid Cycling

A term in bipolar disorder characterized by four or more episodes of mania, hypomania, or depression within a year.

Melancholic

Characterized by a profound presentation of depression, often with significant changes in appetite, sleep, and energy levels, and marked by feelings of sorrow, hopelessness, or inadequacy.