Question
Assume that at t = 0 a stock has price S = $500 and that a call that matures at T with a strike price
Assume that at t = 0 a stock has price S = $500 and that a call that matures at T with a strike price of
X = $500 has premium C = $10.
Assume at the options maturity, t = T, that ST = $550.
Assume that at t = 0 that investor #1 buys 100 shares of stock & sells them at t =T.
Assume that at t = 0 investor #2 buys one call option on the same stock and exercises it at t = T.
What is the ROI (return on investment) for investor #2?
| 100% | ||
| 400% | ||
| 200% | ||
| 300% |
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Quantitative Finance: An Object-Oriented Approach In C++
Authors: Erik Schlogl, Dilip B. Madan
1st Edition
1584884797, 978-1584884798
