You Are Currently Holding a Call Option on a Stock

question 68

Multiple Choice

You are currently holding a call option on a stock with an exercise price of $80.If the current stock price is $60, your net proceeds by exercising this option will be:

• A)($20)
• B)$0
• C)$20
• D)$60 Proceeds = Stock price - Exercise price

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Definitions:

Tragedy Of The Commons

A situation in which individual users, acting independently according to their own self-interest, deplete or spoil shared resources, even though it is not in anyone's long-term interest for this to happen.

Equator

An imaginary line around the Earth's surface located equidistant from the North and South Poles, dividing the Earth into the Northern and Southern Hemispheres.

Command And Control

A traditional management approach where decisions and instructions come from the top of the organizational hierarchy and are strictly followed by lower levels.

Regulatory Agency

A governmental body responsible for exercising supervisory authority over specific areas of economic or social activity, ensuring compliance with laws and regulations.