If an Investor Buys a Call with an Exercise Price

question 48

Multiple Choice

If an investor buys a call with an exercise price of $90 for $4 and the market price of the underlying stock at expiration is $96, what is her profit or loss per share?

• A) $10.00
• B) $8.00
• C) $2.00
• D) -$10.00

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Definitions:

Deferred Imitation

The ability to imitate a modeled act after a delay, indicating the presence of memory and cognitive skills.

Preferential-Looking

A research technique used in developmental psychology to study visual attention and preferences in infants by measuring how long they look at different stimuli.

Habituation Research

The study of the psychological and physiological processes involved in becoming accustomed to a stimulus through repeated exposure.

Perceptual Abilities

The capacity to perceive, interpret, and understand sensory information.