Consider the situation of an investor who buys a European call option with a strike price of $110 to purchase 100 shares of a certain stock.Suppose that the current stock price is $107. Also assume that the expiration date of the option is in 3 months, and that the price of an option to purchase one share is $4. Now suppose that the initial investment is $400. Which one of the following is not correct?

Choose one:

a.If the stock price on the expiration date is less than $110, the investor will clearly choose not to exercise.

b.If the stock price on the expiration date is less than $110,the investor loses the whole of the initial investment of $400.

c.If the stock price on this date is less than $100,the loss amounts to $500.

d.Because the option is European, the investor can exercise only on the expiration date.

e.If the stock price on this date is equal to $100,the investor also loses the whole of the initial investment of $400.