The Price of ABC Shares Is Currently $42 Per Share

Multiple Choice

The price of ABC shares is currently $42 per share, but in six months you expect it to rise to $50. ABC does not pay a dividend. You buy a six- month call on ABC, with a strike price of $45. The option cost $200. What holding period return do you expect on this call? Ignore transaction costs and taxes.

A) 200%.
B) 150%.
C) 250%.
D) 300%.