If the Owner of a Call Option with a Strike

question 26

Multiple Choice

If the owner of a call option with a strike price of $35 finds the stock to be trading for $42 at expiration, then the option:

• A)Expires worthless
• B)Will not be exercised
• C)Is worth at least $7 per share
• D)Cost too much initially

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Definitions:

Breach of Duty

Occurs when an individual or entity fails to fulfill their obligations or standards of care required by law or contract.

GAAP and GAAS

GAAP (Generally Accepted Accounting Principles) refers to a set of accounting standards and practices. GAAS (Generally Accepted Auditing Standards) refers to the standards guiding audits of financial statements.

Engagement Letter

A formal document outlining the scope of services to be provided by a professional firm, often used in accounting and legal services.

Contract

A contract is a legally binding agreement between two or more parties that outlines obligations, rights, and duties that each party agrees to perform or honor.