Bob's DJIA Index call option had a strike price of 261. When he exercised the option, the Dow was at 26,350.
A) Bob received $2,500 from the writer of the contract.
B) Bob paid $250 to the writer of the contract.
C) Bob received $250 from the writer of the contract.
D) Bob paid $2,500 to the writer of the contract.

Question

Quizplus · Accepted Answer

The Answer of Bob's DJIA Index call option had a strike price of 261. When he exercised the option, the Dow was at 26,350.
A) Bob received $2,500 from the writer of the contract.
B) Bob paid $250 to the writer of the contract.
C) Bob received $250 from the writer of the contract.
D) Bob paid $2,500 to the writer of the contract.

Bob's DJIA Index Call Option Had a Strike Price of 261