Assume you bought a call option contract on ABC stock for $1.50/share. The call has an exercise price of $30/share and three months to maturity. At the time you bought the option, the price of the underlying asset was $29/share. If at expiration the price of the underlying is $35/share.

a. Calculate the rate of return on your investment.

b. What would your rate of return be if you had bought the stock instead of the call?