A Call Option on a Stock Has an Exercise Price

question 26

Multiple Choice

A call option on a stock has an exercise price of $12.15.If the stock price at expiration is $11,what is the option payoff for a short call position?

• A)$-11
• B)$11
• C)$1.15
• D)-$1.15
• E)$0

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Definitions:

Debtor's Home

The primary residence of an individual who owes money to creditors; it can be protected under certain bankruptcy laws.

Exempt Property

Property that a debtor is allowed to keep from creditors' claims in a bankruptcy proceeding, as defined by law, to ensure basic living standards.

Judgment Creditors

Individuals or entities entitled to collect a financial judgment from a debtor following a court ruling.

Federal Taxation

The process through which the national government of a country collects taxes from individuals and businesses.