Katie Purchased 6 Call Options on Atlas Co

question 76

Multiple Choice

Katie purchased 6 call options on Atlas Co.stock with a strike price of $40.00.On the expiration date,the stock was priced at $38.95 a share.What is the total payoff on the option contracts?

• A)-$220
• B)-$55
• C)$0
• D)$2.20
• E)$55

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Definitions:

Chi-Squared Distribution

A probability distribution used in hypothesis testing that is applicable to categorical data and tests of independence.

Standard Normal Distribution

A normal distribution with a mean of zero and a standard deviation of one, used as a basis in probability theory.

Nominal Data

Nominal data refers to categorical data that can be named or labeled but not meaningfully ordered.

Confidence Interval

A set of values, procured from sample-based observations, deemed likely to hold the value of a non-specified population characteristic.