You Wrote Ten Call Option Contracts on JIG Stock with a Strike

question 85

Multiple Choice

You wrote ten call option contracts on JIG stock with a strike price of $41 and an option price of $.60. What is your net gain or loss on this investment if the price of JIG is $46.05 on the option expiration date?

• A) -$5,050
• B) -$4,450
• C) $410
• D) $4,450
• E) $5,050

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Definitions:

Consideration

In legal terms, it refers to something of value that is exchanged between parties in a contract, making the agreement legally binding.

Breach of Contract

A situation where one or more parties involved in a contract fail to fulfil their legal obligations as outlined in that contract.

Writing Requirement

A legal stipulation that certain kinds of contracts must be in writing to be enforceable.

Purchase Price

The amount of money that is required to buy something.