You Purchased 3 Call Option Contracts with a Strike Price

question 98

Multiple Choice

You purchased 3 call option contracts with a strike price of $35 and a premium of $1.20. At expiration, the stock was selling for $37.20 a share. What is your total profit or loss?

• A) - $360
• B) - $300
• C) $300
• D) $360
• E) $420

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Definitions:

Proxy Fight

A battle for control of a company where opposing sides attempt to win the votes of shareholders to achieve a particular outcome during the company's annual meeting.

Takeover Candidate

A company that appears attractive for acquisition by another firm due to its assets, financial performance, or market position.

Capital Structure

The way a corporation finances its assets through a combination of debt, equity, and hybrid securities.

Debt and Equity

Components of a company's capital structure, with debt representing borrowed money to be paid back and equity representing ownership interest.