You Purchased Three Call Option Contracts with a Strike Price

question 77

Multiple Choice

You purchased three call option contracts with a strike price of $22.50 and an option premium of $0.45.You held the option until the expiration date.On the expiration date,the stock was selling for $21.70 a share.What is the total profit or loss on your option position?

• A) -$45
• B) $0
• C) -$240
• D) -$120
• E) -$135

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Definitions:

Fluctuation

An irregular rising and falling in number or amount; a variation.

Expectations

Beliefs or anticipations about the future, often based on experience, knowledge, or perceived trends.

Illicit Drug

A substance whose production, sale, or use is prohibited by law, often associated with addiction and illegal trade.

Endorphins

Natural chemicals in the body that fight pain and promote feelings of pleasure and well-being.