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You Have Decided to Buy 10 January 2009 Call Options

question 25

Essay

You have decided to buy 10 January 2009 call options on Merck with an exercise price of $45 per share.How much will this transaction cost you and are these contracts in or out of the money?


Definitions:

Result

The consequence or effect obtained after performing a specific action or series of actions.

Original Amount

The initial sum of money before any changes, such as appreciation, depreciation, or interest, have been applied.

Final Value

The value of an investment or loan after the application of interest or other financial changes.

Simplify

To alter a complex equation or expression into a simpler form that retains the original meaning or value.

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