Suppose the Price of a Share of Google Stock Is

question 13

Multiple Choice

Suppose the price of a share of Google stock is $500.An April call option on Google stock has a premium of $5 and an exercise price of $500.Ignoring commissions, the holder of the call option will earn a profit if the price of the share

• A)increases to $504.
• B)decreases to $490.
• C)increases to $506.
• D)decreases to $496.
• E)None of the options

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Definitions:

Abu Simbel

An ancient temple complex in southern Egypt, built by Pharaoh Ramesses II, notable for its massive rock-cut sculptures.

Temple

A building devoted to the worship, or regarded as the dwelling place, of a god or gods or other objects of religious reverence.

Demotic

Late Egyptian writing.

Rosetta Stone

An ancient Egyptian stone slab bearing inscriptions in three scripts—hieroglyphic, demotic, and Greek—that was the key to deciphering Egyptian hieroglyphs.