Arizona State University (ASU) FIN380 Personal Financial Management Test 3 Practice

Question: 1 / 400

How many shares does a call option typically allow the purchase of?

50 shares

75 shares

100 shares

A call option typically allows the purchase of 100 shares of the underlying asset. This standard quantity is specified in the contract for equity options, making it a fundamental aspect of how options are structured in financial markets. This means that when you buy one call option, you have the right, but not the obligation, to purchase 100 shares of the underlying stock at the predetermined strike price before the option expires.

This structure helps streamline trading and price quotations in the options market, allowing investors to easily calculate their potential profits or losses based on this standard number. Other quantities like 50, 75, or 150 shares are not standard for equity options, which is why they do not apply in this context.

Get further explanation with Examzify DeepDiveBeta

150 shares

Next Question

Report this question

Download Arizona State University (ASU) FIN380 Personal Financial Management Test 3 Practice PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy