Question
Wildhorse wrote (sold) a call option on Ewing Inc. common shares on July 7, 2020 for a premium of $450. The call option is for
Wildhorse wrote (sold) a call option on Ewing Inc. common shares on July 7, 2020 for a premium of $450. The call option is for 240 shares (notional value), and the strike price is $60. The option expires on January 31, 2021. The following data are available with respect to the call option:
| Fair Value | Market Price | |||||
| Date | of Option | of Ewing Shares | ||||
| Sept. 30, | 2020 | $1,780 | $66 per share | |||
| Dec. 31, | 2020 | $945 | $63 per share | |||
| Jan. 4, | 2021 | $1,550 | $65 per share |
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Auditing Cases An Interactive Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
6th edition
133852105, 978-0133852103
