You purchased four call option contracts with a strike price of $40 and an option premium of $1.25. You closed your contract on the expiration date when the stock was selling for $42.50 a share. What is your total profit or loss on your option position?
A)−$50
B)−$10
C)$135
D)$385
E)$500

Question

Quizplus · Accepted Answer

The Answer of You purchased four call option contracts with a strike price of $40 and an option premium of $1.25. You closed your contract on the expiration date when the stock was selling for $42.50 a share. What is your total profit or loss on your option position?
A)−$50
B)−$10
C)$135
D)$385
E)$500

You Purchased Four Call Option Contracts with a Strike Price