Suppose That a Stock Sells at a Price of $40

question 68

Multiple Choice

Suppose that a stock sells at a price of $40 on the expiration date. Compute the payoff to the seller of a call option if the option strike price is $20.

• A) -$20
• B) -$30
• C) -$40
• D) -$50

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Definitions:

Negligence

A lack of acting with the diligence an average reasonable person would show under the same conditions.

Professional

A person engaged in a specified activity as one's main occupation rather than as an amateur.

Negligent

Failing to exercise the care that a reasonably prudent person would exhibit under similar circumstances.

Foreseen Users

Individuals who are reasonably anticipated to use a product or service, considered by manufacturers and service providers in liability assessments.