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:

Outer

Referring to the external part or surface of something.

Pericardial

Related to the pericardium, the membrane enclosing the heart.

Peri-

A prefix meaning around or near, used to denote vicinity to a specific body part or time relative to an event.

Around

In a position or movement encircling, near, or surrounding an object or area.