On December 1,2014 a Company Bought a Call Option Costing

question 91

Multiple Choice

On December 1,2014 a company bought a call option costing $100,000 as a speculative investment.The call option gave the company the right to purchase 100,000 barrels of oil for $110 per barrel during April 2015.As of December 31,2014 the call option had a value of $125,000.The company liquidated the call option on April 15,2015 in exchange for $175,000.Which of the following accurately describes GAAP accounting for this call option?

• A)The realized gain applicable to the year ending December 31,2014 is $25,000.
• B)The realized gain recognized on April 15,2015 is $75,000.
• C)The unrealized gain recognized on April 15,2015 is $50,000.
• D)The call option will be reported on the December 31,2014 balance sheet at $125,000 and a $25,000 unrealized gain will be reported as a component of income from continuing operations for the year ending December 31,2014.

Understand the application of logistic regression for binary dependent variables.

Calculate and interpret degrees of freedom in regression model significance testing.

Analyze the impact of changes in independent variables on the dependent variable in a given model.

Understand the significance testing of individual model coefficients using the t-test.

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