You Purchased Six TJH Call Option Contracts with a Strike

question 19

Multiple Choice

You purchased six TJH call option contracts with a strike price of $40 when the option was quoted at $1.30.The option expires today when the value of TJH stock is $42.90.Ignoring trading costs and taxes,what is your total profit or loss on your investment?

• A)$500
• B)$800
• C)$960
• D)$920
• E)$940

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Definitions:

Assumptions

Preliminary ideas or beliefs taken as truth without verification, often used as a basis for theoretical models or planning.

Expert Estimates

The method of using knowledgeable individuals' judgments to predict outcomes, such as time or cost, in project management or planning.

Scenario Forecast

A planning tool involving the analysis of future situations by considering different plausible states of the world or business environment.

Multiple Predictor Estimates

A method in statistics and forecasting using various predictors or variables to estimate an outcome.