You Purchased Five Call Option Contracts with a Strike Price

question 10

Multiple Choice

You purchased five call option contracts with a strike price of $40 and an option premium of $1.35. You closed your contract on the expiration date when the stock was selling for $42.50 a share. What is your total profit or loss on your option position?

• A) -$50
• B) -$10
• C) $135
• D) $385
• E) $575

---

Definitions:

Fully-Depreciated

A state where an asset has reached the end of its useful life for accounting purposes, with its book value equaling its salvage value or zero.

Leasehold Improvements

Enhancements made to a rental property by a lessee, typically to tailor the space to their specific business needs.

Idle Land

Land owned by a company not currently being used for production, operations, or any other economic activities.

Market Rate

The prevailing interest rate available in the marketplace for securities of similar risk and maturity.