IBM Was Trading at $100 When Mrs

question 18

Multiple Choice

IBM was trading at $100 when Mrs. Peterson bought a 100 call on IBM at a price of $10. Three months later, IBM common stock was trading at $130, and the call option was trading at $33. The leverage factor for this situation would be:

• A)11x.
• B)3.3x.
• C)7.66x.
• D)25.38x.

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Definitions:

American Legal System

The judiciary framework of the United States, including a complex system of laws, courts, and law enforcement agencies.

Gibbons v. Ogden

A landmark decision by the U.S. Supreme Court in 1824 that established the federal government's authority over interstate commerce, overruling state-level attempts to regulate trade.

Individualism

An ideology that prioritizes individual rights and liberties above the control or influence of societal or governmental bodies.