IBM Shares Are Currently Selling at $75

question 96

Multiple Choice

IBM shares are currently selling at $75.The premium on a call option on IBM shares with an exercise price of $60 will be:

• A)Less than $15
• B)Greater than $15
• C)Equal to $15
• D)Zero

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Definitions:

Bond Investment

Purchasing of bonds as a way to generate income through interest payments, with potential for capital gains.

Book Value

The value of an asset as it appears on a balance sheet, calculated by subtracting any depreciation or amortization from the asset's original cost.

Available-For-Sale

A classification used in accounting for financial assets, denoting securities that a company plans to sell but not immediately or in the near term.

Vertically Integrated

A strategy where a company expands its operations into different stages of production within the same industry, from raw materials to finished products.