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MMLU / Smythe Co. invested 200inacalloptionfor100sharesofGinCo..50 par…

Problem

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question

Smythe Co. invested 200inacalloptionfor100sharesofGinCo.200 in a call option for 100 shares of Gin Co. .50 par common stock, when the market price was 10pershare.Theoptionexpiredinthreemonthsandhadanexercisepriceof10 per share. The option expired in three months and had an exercise price of 9 per share. What was the intrinsic value of the call option at the time of initial investment?
Plain-text mathematical notation (without MathML)
Smythe Co. invested 200inacalloptionfor100sharesofGinCo..50 par common stock, when the market price was 10pershare.Theoptionexpiredinthreemonthsandhadanexercisepriceof9 per share. What was the intrinsic value of the call option at the time of initial investment?
Original LaTeX notation
Smythe Co. invested $200 in a call option for 100 shares of Gin Co. $.50 par common stock, when the market price was $10 per share. The option expired in three months and had an exercise price of $9 per share. What was the intrinsic value of the call option at the time of initial investment?

choices

  1. $50
  2. $100
  3. $200
  4. $900

subject

professional_accounting

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