An Investor Purchases 25 Call Option Contracts at a Price

question 53

Multiple Choice

An investor purchases 25 call option contracts at a price of $1.86 and a strike price of $50. At expiration, the stock price is $47.62. What is the profit on this transaction?

• A) -$10,600
• B) -$5,950
• C) $1,300
• D) -$4,650
• E) $5,950

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Definitions:

Selection Bias

A distortion in the statistical analysis caused by a non-random selection of data, leading to misleading conclusions.

Random Sample

A subset of individuals chosen from a larger set, where each individual has an equal chance of being selected.

Selection Bias

The bias introduced into research results when participants are not randomly chosen, potentially causing the sample to not accurately represent the larger population.

Serious Medical Issues

Health conditions that require extensive medical attention, potentially including complex procedures or long-term care.