Series 7 - General Securities Representative Exam

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ABC stock is trading at $40. A trader buys the $45 June call for $2.00. At expiration the stock is at $48.00. Exclusive of fees and commission, what is the trader's profit or loss?

$100 profit
A
$100 loss
B
$300 profit
C
$300 loss
D

Explanations

The trader outlaid $200 in capital to buy the 45 call. At $48 at expiration, the call is worth $3.00 ($300) yielding a profit of $100

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