Your Beloved Machine's Current Stock Price Is $96

question 15

Multiple Choice

Your Beloved Machine's current stock price is $96.If YBM December 90 calls trade for $6 and the stock has a 3 for 2 split,then the following will happen:

• A) an investor holding two shares now owns three shares,the new share price is $64,the new strike price is $60,and each contract has 150 shares
• B) an investor owns the same number of shares,the new share price is $64,the new strike price is $60,and each contract has 100 shares
• C) an investor holding two shares now owns three shares,the new share price is $144,the new strike price is $60,and each contract has 66 shares
• D) an investor holding two shares now owns three shares,the new share price is $60,the new strike price is $60,and each contract has 150 shares
• E) None of these answers are correct.

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Definitions:

Collections Float

The time gap between when a check is deposited in a bank and when the funds become available, affecting the cash flow of the business.

Credit Department

The division within a company or financial institution that is responsible for managing customer credit and collecting payments.

DSO

Days Sales Outstanding (DSO) is a measure of the average number of days that it takes a company to collect payment after a sale has been made.

Money

An officially issued legal tender that typically includes coins and paper notes, used as a medium of exchange for goods and services.