Suppose You Purchase a Call Option for $5 and a Strike

question 101

Multiple Choice

Suppose you purchase a call option for $5 and a strike price of $20. On the expiration day, the price of the stock is $30. What is the return on the call option if you hold your position until maturity?

• A) 25%
• B) 50%
• C) 75%
• D) 100%

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Definitions:

Mediator

An impartial individual or entity that intervenes in disputes or negotiations to facilitate an agreement or reconciliation between parties in conflict.

Spokesperson

An individual designated to speak on behalf of a company, organization, or group, responsible for communicating its messages to the public or specific audiences.

Enabler

An individual or tool that facilitates the achievement of an objective or the solving of a problem.

Social Control

Mechanisms, strategies, and practices employed by society to regulate behavior and ensure conformity to norms and regulations.