Answer:
A call option on a stock selling at $40
Step-by-step explanation:
A call option confers a right and not the obligation on it's holder to buy a security at a pre determined price known as strike price or exercise price before or at expiration date.
A call buyer exercises his right when strike price is lower than the current market price.
Call buyer's profit is expressed as;
=Current Market Price - Strike Price - Option premium paid
The lower the strike price, the higher the stock sells since there exists possibility of earning a greater profit.