Question
JTC purchased call options on Flynn common shares on July 7, 2020, for $200 as a speculative investment. The call options give JTC the right
JTC purchased call options on Flynn common shares on July 7, 2020, for $200 as a speculative investment. The call options give JTC the right to buy 100 shares at a strike price of $20 each. The options expire on January 31, 2021.
The following data is observed through 2020:
Flynn Stock Price | Option Time Value | |
July 7, 2020 | $20 | $200 |
September 30, 2020 | $18 | $150 |
December 31, 2020 | $22 | $90 |
a. At September 30, 2020, the options are on JTC's balance sheet at a value of ? Muliple Choice: ["$350", "$150", "$200", "$1,950"].
b. In the fourth quarter (October - December) of 2020, JTC records a loss in time value of? Muliple Choice: ["$150", "$90", "$110", "$60"].
c. At December 31, 2020, the options are on JTC's balance sheet at a value of? Muliple Choice: ["$260", "$350", "$460", "$490", "$200", "$290"].
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