You Pay $3

question 57

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
• E)$0

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Definitions:

Hypothec

A legal term primarily used in civil law jurisdictions to describe a right or security interest granted over an asset to secure the repayment of a debt without transferring title.

Fee

A payment made to a professional or an organization in exchange for services or advice.

Covenant

A formal, written agreement or promise between two or more parties, often featuring in contracts or real estate transactions.

Discharge

In legal terms, the release or extinguishment of an obligation, debt, or charge.