The Owner of a Three Month Call Option Allows the Option

question 14

Multiple Choice

The owner of a three month call option allows the option to expire unexercised. The owner

• A) has a capital loss equal to the market price of the stock.
• B) has a capital loss equal to the strike price.
• C) has a capital loss equal to the premium.
• D) has a capital loss equal to the market value less the strike price.

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Definitions:

Continental Rift

A low trough or series of troughs bounded by normal faults, especially where two parts of a continent begin to rift apart.

Ocean-ocean Convergent

A tectonic boundary where two oceanic plates converge, leading to the subduction of one plate beneath the other and often resulting in volcanic island arcs.

Geologic Activity

A term that encompasses processes occurring within the Earth's crust and surface, including earthquakes, volcanic eruptions, and plate tectonics.

Plate Boundaries

The edges where two or more tectonic plates meet, characterized by geological activity such as earthquakes and volcanic eruptions.