Suppose You Purchase a Call Option for $5 and a Strike

question 101

Multiple Choice

Suppose you purchase a call option for $5 and a strike price of $20. On the expiration day, the price of the stock is $30. What is the return on the call option if you hold your position until maturity?

• A) 25%
• B) 50%
• C) 75%
• D) 100%

Distinguish between investment centers, profit centers, and cost centers.

Calculate and interpret residual income.

Understand the concept of transfer pricing and its approaches.

Understand the use of the balanced scorecard in measuring financial and nonfinancial performance.