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Suppose You Purchase a Call Option with a Strike Price

question 31

Essay

Suppose you purchase a call option with a strike price of $85 for an options price of $10 How much profit will you earn if you exercise it when the price is $100?


Definitions:

Partnership

A legal arrangement where two or more persons agree to manage and operate a business and share its profits or losses.

Written Agreement

A formal contract that outlines the terms and conditions of a particular arrangement, documented in writing.

Chain-style Business

A business model where multiple outlets of the same company offer the same product or service, typically under the same brand.

Franchisor

A business entity that grants the right to an individual or group to carry out commercial activities using its trademark and business model in exchange for a fee or royalty.

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