Suppose You Bought 10 Smith Enterprise Call Options with a Strike

question 25

Multiple Choice

Suppose you bought 10 Smith Enterprise call options with a strike price of $52 at $2.75 per option.If the price of Smith stock is $50,what is your net profit (or loss) ? Ignore transaction costs.

• A) $0
• B) -$27.50
• C) $27.50
• D) $500

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Definitions:

Odd Number

An integer that cannot be divided evenly by two, exemplified by numbers like 1, 3, 5, etc.

Mirror

A reflective surface, typically glass coated with a metal amalgam, that reflects a clear image.

Classical View

A traditional perspective or theory in a specific field that has stood the test of time and forms the foundation for subsequent developments.

Triangle

A polygon with three edges and three vertices, representing the simplest form of a polygonal shape.