Compute the Net Profit or Loss on the Maturity Date

question 1

Multiple Choice

Compute the net profit or loss on the maturity date for a December 45 call for which the buyer paid a premium of $3.75 and the spot price at maturity is $49.25.

• A) -$1
• B) -$0.50
• C) $0.50
• D) $1
• E) None of these answers are correct.

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Definitions:

Dust Boots

Protective covers placed over joints or mechanisms to prevent the ingress of dirt and debris.

Anchor

A device, usually made of metal, used to connect a vessel to the bed of a body of water to prevent the craft from drifting due to wind or current.

Internal Friction Surface

The surface within a mechanical system where internal friction occurs, often influencing the efficiency and wear of the system.

Shoes

Footwear made from various materials, designed to protect and comfort the human foot while doing various activities.