Question
A 6-month call option contract on 100 shares of Home Depot common stock with a strike price of $ 59.95 can be purchased for $
A 6-month call option contract on 100 shares of Home Depot common stock with a strike price of $ 59.95 can be purchased for $ 610. Assuming that the market price of Home Depot stock rises to $ 75.31 per share by the expiration date of the option, what is the call holder's profit? What is the holding period return?
1)The profit this option would generate over the 6-month holding period is $____. (Round to the nearest cent.)
2)The 6-month holding period return is______ (Round to the nearest whole percent.)
3)The annual holding period return is_____. (Round to the nearest whole percent.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started