Last Week,you Purchased a Call Option on Edgewater Stock with a Strike

question 76

Multiple Choice

Last week,you purchased a call option on Edgewater stock with a strike price of $40.The stock price was $39.80 and the option price was $0.45 at that time.What is the intrinsic value per share if the stock is currently priced at $39.10?

• A)-$90
• B)-$70
• C)$0
• D)$70
• E)$90

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Definitions:

Physical Movement

The actual transfer or change in location of goods, which can be relevant in the management of inventory and supply chains.

Perpetual System

An inventory system that continuously updates the balance of inventory after each purchase or sale.

Average Cost Formula

An inventory costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold.

Net Realizable Value

The estimated selling price of goods minus the cost of their sale or disposal, essentially the net value obtainable.