If an Investor Buys a 100-Share Call Option for $325

question 101

Multiple Choice

If an investor buys a 100-share call option for $325 with an exercise price of $15 and the underlying price per share of the stock at expiration is $13, what is the amount of profit or loss, ignoring brokerage fees?

• A) There would be a profit of $525.
• B) There would be a loss of $125.
• C) There would be a loss of $325.
• D) There would be a loss of $525.

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