An Investor Buys a Call with a Strike Price of $40

question 4

Multiple Choice

An investor buys a call with a strike price of $40 and sells a call on the same stock and with the same expiration date that has a strike price of $35. What will the total payoff for this strategy
Be if the price of the stock is $43 when the options expire?

• A)+$5.00
• B)+$2.00
• C)-$5.00
• D)-$2.00

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Definitions:

Short-term Memory Capacity

The amount of information that can be held in the short-term memory, often quantified as 7 ± 2 items.

Extended Postal Codes

A longer version of a postal code that includes additional digits for more precise location identification within a geographic area.

Intellectual Capacity

Refers to the ability of the mind to come to correct conclusions about what is true and what is false, and to solve problems.

Sensory Memory

The briefest segment of memory that enables people to preserve sensory impressions once the initial stimuli are no longer present.