Use the table for the question(s)below.
Consider the following information on options from the CBOE for Merck:
-Assume you want to buy one option contract that with an exercise price closest to being at-the-money and that expires January 2009.The current price that you would have to pay for such a contract is:
A)$680
B)$380
C)$650
D)$420

Question

Use the table for the question(s)below.
Consider the following information on options from the CBOE for Merck: 
-Assume you want to buy one option contract that with an exercise price closest to being at-the-money and that expires January 2009.The current price that you would have to pay for such a contract is:
A)$680 
B)$380 
C)$650 
D)$420

Quizplus · Accepted Answer

A)One contract is for 100 shares.The option closest to being at the money has an exercise price of $40.00 and currently has an ask price of $6.80.Since you are buying the option,you will have to pay the ask price.So $6.80 × 100 shares per contract = $680

Use the Table for the Question(s)below