Laney Just Purchased 3 Call Option Contracts on Microsoft Stock

question 79

Multiple Choice

Laney just purchased 3 call option contracts on Microsoft stock. How many shares of stock can she buy at the strike price based on these contracts?

• A)3
• B)30
• C)300
• D)30,000
• E)300,000

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Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing corporation, reducing the amount of outstanding stock on the open market.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing ownership interest.

Financial Statements

Systematic records that provide an overview of a company's financial condition, including balance sheets, income statements, and cash flow statements.

Account Balances

The total amount of money in a financial repository, such as a bank or investment account, at any given moment.