You Purchased a Call Option for a Premium of $4

question 23

Multiple Choice

You purchased a call option for a premium of $4.The call has an exercise price of $29 and is expiring today.The current stock price is $31.What would be your best course of action?

• A) Exercise the call because the stock price is greater than the exercise price.
• B) Do not exercise the call because the stock price is greater than the exercise price.
• C) Do not exercise the call because the difference between the exercise price and the stock price is not enough to cover the amount of the premium.
• D) Exercise the call to get a positive net return on the investment.
• E) Do not exercise the call to avoid a negative net return on the investment.

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Definitions:

Opt-In

A method of permission marketing where users explicitly choose to receive promotional or informational material, usually via email.

Opt-Out

Opt-out refers to the choice made by individuals to exclude themselves from a particular service, activity, or data collection process, typically in marketing or online tracking.

Purchasing Decision

The process by which a consumer or organization selects a product or service to buy, influenced by various factors including price, quality, and preferences.

DoubleClick

A subsidiary of Google that develops and provides Internet ad serving services, allowing companies to track the effectiveness of their online marketing campaigns.