You Pay $3

question 1

Multiple Choice

You pay $3.25 for a call option on Luther Industries that expires in three months with a strike price of $40.00.Three months later,at expiration,Luther Industries is trading at $41.00 per share.Your profit per share on this transaction is closest to:

• A)-$1.00.
• B)$1.00.
• C)-$2.25.
• D)$2.25.

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Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, showing the net worth and financial health of the business.

Cash Register

A machine or device at a point of sale used to calculate and register transactions and to store money.

Cash Over and Short

An account used to report the discrepancies between the actual amount of cash received and the expected amount in a cash transaction.

Count of Cash

The process of physically verifying the amount of cash on hand at a particular time.