QUESTION 1

You purchase one Check-Point July 120 call contract for a premium of $5. The stock has a 2 for 1 split prior to the expiration date. You hold the option until the expiration date when Check-Point stock sells for $64 per share. You will realize a ______ on the investment.

A. $2,800 profit

B. $300 profit

C. $500 loss D. $1000 loss D. $5,600 loss

QUESTION 2

You purchase one Cisco July 15.00 put contract for a premium of $5.00. You hold the option until the expiration date when Cisco stock sells for $17.50 per share. You will realize a ______ on the investment.

A- $300 profit

B- $500 profit

C- $200 loss D- $500 loss E- $200 profit