Question
(a)A three-month call option contract on 100 shares of Demart common share with a strike price of RM 59 can be purchased for RM 590.
(a)A three-month call option contract on 100 shares of Demart common share with a strike price of RM 59 can be purchased for RM 590. Assuming that the market price of Demart rises to RM 66 per share by the expiration date of the option.
(i)Evaluate the call holder's profit. (4 Marks)
(ii)Evaluate the holding period return (3 Marks)
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
13th edition
978-1285027371, 128502737X, 978-1133541141
