The Profit or Loss for the Holder of a $5

question 139

Multiple Choice

The profit or loss for the holder of a $5 call option (purchased for $0.50) given the share price at expiry is $5.20, will be:

• A)zero, because they will not exercise
• B)a loss of $0.50, because they will not exercise
• C)a loss of $0.30, because they will exercise
• D)a profit of $0.20, because they will exercise.
• E)None of these are correct.

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