Multiple Choice
The premium for a contract of 100 call options is $400. The strike (exercise) price per share is $30 and the current market price of a share is $33. The investor should:
A) Let the option expire because the market price has to be below the strike price of a call before an investor can make a profit on the investment.
B) Allow the option to expire because the premium of $4 is greater than the difference between the strike price and market price.
C) Exercise the options because she will make a profit of $300.
D) Exercise the options in order to minimize the loss to $100.
Correct Answer:
Verified
Correct Answer:
Verified
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