Carl purchased a call option on Apex stock that had a premium of $4, an exercise price of $25, and six-months to expiration. When he purchased the option, Apex was selling at $27 per share. What profit (per share) would Carl earn on his option transaction if Apex sells at $31 per share at expiration?
A) $0
B) $2
C) $4
D) $6

Question

Quizplus · Accepted Answer

The profit is calculated as the difference between the stock price at expiration ($31) and the exercise price ($25), minus the premium paid ($4). So, ($31 - $25) - $4 = $2.

Carl Purchased a Call Option on Apex Stock That Had