You Wrote Six Call Option Contracts on MNO Stock with a Strike

question 72

Multiple Choice

You wrote six call option contracts on MNO stock with a strike price of $25 and an option price of $.15.What is your total net profit or loss on all transactions related to this investment if the price of MNO is $26.20 on the option expiration date? Ignore taxes and transaction costs.

• A)-$345
• B)-$630
• C)-$810
• D)$630
• E)$810

---

Definitions:

Aggregate Expenditure

Aggregate expenditure is the total amount of spending in an economy, including consumer spending, investment, government spending, and net exports.

Equilibrium Real GDP

The level of gross domestic product where aggregate supply equals aggregate demand at current prices, adjusted for inflation.

Marginal Propensity

Refers to the ratio of the change in an individual's consumption to the change in their income.

Disposable Income

Money available to households for personal spending and saving after deducting their income taxes.