You Purchased Six Call Option Contracts on ABC Stock with a Strike

question 99

Multiple Choice

You purchased six call option contracts on ABC stock with a strike price of $32.50 when the option was quoted at $1.65.The option expires today when the value of ABC stock is $34.60.Ignoring trading costs and taxes,what is the net profit or loss on this investment?

• A)$0
• B)$270
• C)$310
• D)$840
• E)$1,260

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Definitions:

Copayments

A fixed amount paid by a patient each time a medical service is accessed, with the remainder covered by health insurance.

Deductibles

Deductibles are the amount an insurance policyholder must pay out-of-pocket before the insurance coverage begins to pay for covered losses.

Out-Of-Pocket

Expenses that are paid directly in cash or cash equivalents during a transaction, without any form of credit.

Medicare

A federal program that provides health insurance to people over the age of 65 and to certain younger people with disabilities.