The Price of a Stock on July 1 Is $57

question 9

Multiple Choice

The price of a stock on July 1 is $57.A trader buys 100 call options on the stock with a strike price of $60 when the option price is $2.The options are exercised when the stock price is $65.The trader's net profit is

• A) $700
• B) $500
• C) $300
• D) $600

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Definitions:

Large-company Stocks

Shares that represent ownership in large, well-established companies typically characterized by a high market capitalization.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values, often used to gauge the risk associated with a certain investment or portfolio.

Probability

A measure of the likelihood of a specific event or outcome occurring, expressed as a number between 0 and 1.