The value of a stock index option is equal to:
A) The index value multiplied by $100.
B) The index value multiplied by the number of shares purchased.
C) The index value multiplied by the contract multiple.
D) The share price divided by the index value.
E) None of the above.

Question

Quizplus · Accepted Answer

The value of a stock index option is determined by the index value multiplied by the contract multiple. This multiple is a specified dollar amount that varies between index options, and it represents the amount of money per point of the index.

The Value of a Stock Index Option Is Equal To