Answer :
On the investment made under the specified circumstances, you will incur a loss of $700.
How do call options work?
A financial contract known as a "call option" grants you the right, but not the obligation, to buy a particular stock at a predetermined price on or before a given date.
Special terminology is used to describe different elements and actions in call options:
Strike Price: The strike price, also known as the "strike price," is the price at which the seller is willing to sell a single share of stock on or before the option's expiration date.
The contact is considered to be "in the money" when the underlying stock's current price is higher than the strike price.
Without money: The contract is said to be "out of the money" when the underlying asset's current value is less than the strike price.
On the mark: This refers to a contract when the strike price and the underlying stock price are identical, as one might expect.
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