If an investor buys a 100-share call option for $250 with an exercise price of $60 and the underlying price per share of the stock at expiration is $66, what is the amount of profit or loss, ignoring brokerage fees?
A) There would be a profit of $350.
B) There would be a profit of $600.
C) There would be a loss of $350.
D) There would be a loss of $250.

Question

Quizplus · Accepted Answer

The profit is calculated as (Selling Price - Exercise Price) * Number of Shares - Cost of Option = ($66 - $60) * 100 - $250 = $350.

If an Investor Buys a 100-Share Call Option for $250