Suppose You Own a Call Option on a Stock with a Strike

question 25

Multiple Choice

Suppose you own a call option on a stock with a strike price of $20 that expires today. The price of the underlying stock is $15. If you exercise the option and immediately sell the stock, then:

• A) you will earn $5.
• B) you will lose $5.
• C) you will lose $15.
• D) you will earn $15.

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Definitions:

Suicide

The act of purposefully ceasing one’s own life.

Distress

Negative stress that arises from challenging or adverse situations, often leading to discomfort or even mental health issues.

Outpatient Care

Medical treatment provided to patients who do not require overnight hospitalization.

Psychological Disturbances

Disorders or disruptions of mental functioning that significantly impact an individual's thoughts, emotions, or behavior, causing distress or impairment in daily life.