You purchased one ABP 35 call option contract at a quoted price of $1.65. What is your net gain or loss on this investment if the price of ABP is $34.20 on the option expiration date?
A) -$165
B) -$85
C) $0
D) $85
E) $165

Question

Quizplus · Accepted Answer

Since the price of ABP ($34.20) is below the strike price of the call option (35), the option expires worthless. Therefore, the loss is equal to the initial cost of the option, which is $1.65 per share for 100 shares, totaling a loss of $165.

You Purchased One ABP 35 Call Option Contract at a Quoted