Turn back to Figure 2.10 and look at the Apple options. Suppose you buy an April expiration

Question:

Turn back to Figure 2.10 and look at the Apple options. Suppose you buy an April expiration call option with exercise price 105.

a. If the stock price in April is $111, will you exercise your call? What are the profit and rate of return on your position?

b. What if you had bought the April call with exercise price 100?

c. What if you had bought an April put with exercise price 105? LO.1

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