Andrea Wrote a Three-Month Call on Echo Stock

question 86

Multiple Choice

Andrea wrote a three-month call on Echo stock. The option cost $200 and the strike price was $10. What does the market price of Echo have to be for Andrea to break-even on this investment if the option is exercised? Ignore transaction construed taxes.

• A) $10
• B) $12
• C) $8
• D) cannot be determined from the information provided

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Definitions:

Agricultural Societies

Societies primarily engaged in farming and the cultivation of land as their main source of livelihood.

Plow Technology

Agricultural tools and techniques related to the plow, a farming implement used for tilling soil, making it ready for sowing seeds.

First Past

A term often used in the context of elections, typically referring to a "first-past-the-post" system where the candidate with the most votes wins, irrespective of whether a majority is achieved.

Proportional Representation

An electoral system in which parties gain seats in proportion to the number of votes cast for them, aiming for a more representative alignment of legislative seats to popular support.