Essay
A call option is purchased for a premium of $400.The current price of the stock is $42 per share and the exercise price is $44 per share.The option is exercised when the stock is selling for $50 per share.What would be your return on the option if after exercising it,you immediately sold the stock at the market price of $50 per share? Ignore taxes and brokerage commissions.
(a)8 percent
(b)12 percent
(c)50 percent
(d)200 percent
Correct Answer:
Verified
Correct Answer:
Verified
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