1. Which one of the following statements concerning call option writers is true?

Multiple Choice

a. The call option writer receives a cash payment when the option is written.

b. The call option writer earns a profit when an in-the-money option is exercised.

c. The call option writer has the option, but not the obligation, to purchase shares if the option is exercised.

d. Call option writers promise to purchase shares if the call option is exercised.

e. The call option writer is betting that the market price of the underlying asset will increase.

2.The last day on which an owner of an option can elect to exercise that option is referred to as the _____ date.

Multiple Choice

• intrinsic

• ex-option

• ex-payment

• expiration

• opening

3. You wrote ten call option contracts on JIG stock with a strike price of $41 and an option price of $.60. What is your total profit on this investment if the price of JIG is $46.05 on the option expiration date?

Multiple Choice

• $5,050

• $4,450

• $4,100

• $5,050

• $4,450