Multiple Choice
IBM was trading at $100 when Mrs. Peterson bought a 100 call on IBM at a price of $10. Three months later, IBM common stock was trading at $130, and the call option was trading at $33. The leverage factor for this situation would be:
A) 11x.
B) 3.3x.
C) 7.66x.
D) 25.38x.
Correct Answer:
Verified
Correct Answer:
Verified
Related Questions
Q13: A put is an option to buy
Q14: Standardized strike prices and expiration dates in
Q15: The difference between a put and a
Q16: The intrinsic value of a put option
Q17: The intrinsic value of a call option
Q19: A stock is selling for $45.75, with
Q20: Which of the following is NOT a
Q21: The total premium for an option consists
Q22: An investor striving for maximum leverage will
Q23: Dividends on the underlying common stock will