You purchased four call option contracts with a strike price of $24.00 and a premium of $1.30. At expiration, the stock was selling for $25.50 a share. What is the total amount it cost you to acquire your shares?
A)$8,620
B)$10,000
C)$10,500
D)$11,860
E)$10,120

Question

Quizplus · Accepted Answer

The total cost includes the strike price and the premium. Each contract is for 100 shares, so for four contracts, you have 400 shares. The cost is (400 shares * $24 strike price) + (400 shares * $1.30 premium) = $9,600 + $520 = $10,120.

You Purchased Four Call Option Contracts with a Strike Price