The spot price of the market index is $900.After 3 months,the market index is priced at $920.An investor has a long call option on the index at a strike price of $930.After 3 months,what is the investor's profit or loss?
A) $10 loss
B) $0
C) $10 gain
D) $20 gain

Question

Quizplus · Accepted Answer

Since the market index is priced at $920 after 3 months, which is below the strike price of $930, the call option will not be exercised because it is out of the money. Therefore, the investor does not make a profit or a loss from the movement of the market index itself. The profit or loss from the option would depend on the premium paid for the option, which is not provided in the question.

The Spot Price of the Market Index Is $900