Option Pay-Offs: What Is the Pay-Off for a Call Option

question 85

Multiple Choice

Option pay-offs: What is the pay-off for a call option with a strike price of $45 if the underlying share price at expiration is $75?

• A) $30
• B) $45
• C) $75
• D) You should not exercise the option.

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Definitions:

Cooperative Federalism

A concept of federalism in which national, state, and local governments interact cooperatively and collectively to solve common problems, rather than making policies separately.

Dual Federalism

A concept of federalism where the federal and state governments are seen as distinct entities providing separate powers to the people, with minimal overlap.

Reserved Powers

Powers which are not explicitly listed in the U.S. Constitution as belonging to the federal government and are therefore, according to the Tenth Amendment, reserved to the states or the people.

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The origin or basis of a legal principle found within a constitution.