On March 30 You Are Holding a Call Option with an Exercise

question 106

Multiple Choice

On March 30 you are holding a call option with an exercise price of $60 that will expire on March 31. The closing price of the stock on March 30 is $59. What is the value of your call option?

• A) $1
• B) -$1
• C) Minimal value
• D)Zero

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Definitions:

Budgeted Sales

The projected amount of sales, in units or dollars, that a company plans to achieve in a specific period.

Production Budget

A forecast of the quantity of products that must be manufactured in a specified time period to meet customer demand and maintain inventory levels.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases minus cost of goods sold.

Budgeted Sales

Predicted sales revenue for a future period, based on historical data, market analysis, and other forecasting methods.