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

question 97

Multiple Choice

Suppose you purchase a call option for $5 and a strike price of $40.On the expiration day,the price of the stock is $55.What is the return on the call option if you hold your position until maturity?

• A)125%
• B)200%
• C)275%
• D)300%
• E)-100%

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Definitions:

Pollen Grains

Male gametophytes of seed plants, which are responsible for the transfer of male genetic material during the process of pollination.

Archegonia

The female reproductive structure in ferns, bryophytes, and some gymnosperms, containing the egg cell.

Egg-Producing Structures

Organs or parts of organisms specialized in producing eggs, significant in the reproduction of various animals and some plants.

Fern

Member of a group of land plants that have large fronds; in the sexual life cycle, the independent gametophyte produces flagellated sperm, and the vascular sporophyte produces windblown spores.