What Is the Option Buyer's Total Profit or Loss Per

question 109

Multiple Choice

What is the option buyer's total profit or loss per share if a call option is purchased for a $5 premium, has a $50 exercise price, and the stock is valued at $53 at expiration?

• A) -$5
• B) -$2
• C) $3
• D)$8

---

Definitions:

Acceleration

in physics, refers to the rate of change of velocity of an object with respect to time.

Utility

A measure of satisfaction or pleasure that a consumer derives from consuming goods and services.

Utility Function

A mathematical representation of how consumer preferences are ordered for different goods or bundles of goods.

Utility Level

A quantification of the satisfaction or happiness obtained from consuming a set of goods and services.