Question
Midori bought 4 RHW Inc March 40 call options for a premium of $4.00 when RHW Inc shares were trading at $38.00. A short time
Midori bought 4 RHW Inc March 40 call options for a premium of $4.00 when RHW Inc shares were trading at $38.00. A short time later, this same investor sold her 4 call options for $4.60 when RHW Inc shares were trading at $40.00. What is the profit or loss for Midori on this transaction (ignoring any other costs or considerations)?
A) $240 profit
B) $800 profit
C) $1.040 loss
D) $460 loss
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Public Finance and Public Policy
Authors: Jonathan Gruber
5th edition
1464143331, 978-1464143335
