You Purchased Four Call Option Contracts with a Strike Price

Multiple Choice

You purchased four call option contracts with a strike price of $40 and an option premium of $1.25. You closed your contract on the expiration date when the stock was selling for $42.50 a share. What is your total profit or loss on your option position?

A) −$50
B) −$10
C) $135
D) $385
E) $500