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

question 16

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%
• E)0%

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Definitions:

Welfare

The health, happiness, and fortunes of a person or group, often considered in policy and economic discussions.

Individualism

A social theory emphasizing the moral worth of the individual and the importance of personal independence and self-reliance.

Needs

Basic or psychological requirements for the well-being of an individual.

Autonomy

The degree of freedom and independence an individual or entity has to make choices and decisions without external control.