Suppose You Purchase a Call Option for $4 and a Strike

question 50

Multiple Choice

Suppose you purchase a call option for $4 and a strike price of $30. On the expiration day, the price of the stock is $40. What is the return on the call option if you hold your position until maturity?

• A) 125%
• B) 130%
• C) 150%
• D) 170%

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Definitions:

Decomposer

Organisms, typically bacteria and fungi, that break down dead or decaying organisms, thereby playing a key role in the nutrient cycle.

Saccharomyces

A genus of fungi that includes many yeast species, widely used in baking, brewing, and wine-making.

Arbuscular Mycorrhizae

A type of symbiotic relationship between plants and fungi, where the fungus invades the plant roots to enhance nutrient and water absorption.

Endomycorrhizae

A type of mycorrhiza in which the fungus penetrates the cortical cells of the roots of a vascular plant, enhancing nutrient exchange.