Suppose You Bought 10 Smith Enterprise Call Options with a Strike

question 43

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 $56,what is your net profit (or loss) ? Ignore transaction costs.

• A) $0
• B) $12.50
• C) -$27.50
• D) $40

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Definitions:

Trading Posts

were locations established primarily for the purpose of trading goods between traders and local populations, significant during the era of exploration and colonial expansion.

Zuni

A Native American tribe primarily located in New Mexico, known for their unique cultural practices, religious beliefs, and handmade jewelry.

Hopi

A Native American tribe primarily residing in northeastern Arizona, recognized for their rich cultural traditions, cliff dwellings, and skilled artistry, particularly in pottery and weaving.

Irrigation

The artificial application of water to land to assist in the production of crops.