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Harlamova29_29 [7]
3 years ago
13

2) You purchase one MBI July 125 call contract (equaling 100 shares) for a premium of $5. You hold the option until the expirati

on date, when MBI stock sells for $123 per share. You will realize a ________ on the investment. A) $200 profit B) $200 loss C) $500 profit D) $500 loss
Business
1 answer:
PtichkaEL [24]3 years ago
8 0

Answer:

D) $500 loss

Explanation:

The computation of the realized value on the investment is shown below:

= Number of shares × premium

= 100 shares × $5

= $500 loss

Since the call is for 125 shares for $125 and the selling price per share is $123  due to which the contract is not implemented. So the premium amount would be recorded as a loss of $500

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