You Bought Twelve Call Option Contracts with a Strike Price

question 85

Multiple Choice

You bought twelve call option contracts with a strike price of $27.50 and a premium of $0.77. At expiration, the stock was selling for $26.90 a share. What is the total profit or loss on your option position if you did not exercise it prior to the expiration date?

• A) -$9.24
• B) -$10.20
• C) $0
• D) -$924
• E) -$1,020

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Definitions:

World Price

The worldwide market value of a product or service, determined by international supply and demand dynamics.

Baseballs

Baseballs are the spherical sporting equipment used in the game of baseball, consisting of a cork core wrapped in yarn and covered with leather.

Import Quota

A government-imposed limit on the quantity or monetary value of a certain good that can be imported into a country.

Domestic Production

The total value of all goods and services produced within a country's borders.