Suppose That a Share of Callidus Corp Sells at a Price

question 3

Multiple Choice

Suppose that a share of Callidus Corp sells at a price of $45 on the expiration date. Compute the payoff to the seller of a call option if the exercise price is $40.

• A)-$5
• B)-$40
• C)-$45
• D)$0

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Definitions:

Tax Revenue

Tax revenue represents the income that a government receives from taxing individuals and businesses within its jurisdiction.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where supply equals demand in a market.

Price

Price is the amount of money expected, required, or given in payment for something.

Tax

A compulsory financial charge imposed by a government on individuals or entities to fund government spending and public expenditures.