Ryan TGates Buys a Call Option on Hoste Enterprise for $3

question 16

Multiple Choice

Ryan T.Gates buys a call option on Hoste Enterprise for $3.The call option has a strike price of $35 and 6 months to expiration.If the price of Hoste Enterprise is $33 in 6 months how much is the call option worth at expiration.

• A) $3
• B) $2
• C) $-2
• D) $0

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Definitions:

Negligence

A legal concept where an individual fails to exercise a reasonable level of care, resulting in harm or damage to another person.

Principal

In law, a principal can refer to a party who grants authority to an agent to act in their stead; in finance, it can refer to the original amount of money invested or loaned, before any interest.

Unauthorized Signatures

Signatures made without the express permission or authority of the individual or entity purported to have signed, often leading to legal disputes.

Agency Authority

The legal capacity granted to an agent to act on behalf of someone else, allowing them to enter into contracts and make decisions.