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Buffelheads stock price is $220 and could halve or double in each six-month period. A call option on Buffelhead has an exercise price of $165.
Buffelheads stock price is $220 and could halve or double in each six-month period. A call option on Buffelhead has an exercise price of $165. The premium is $4 per share.
a. If you purchased a call option covering 100 shares and the price at maturity was $170, calculate your profit (loss) from purchasing the call option.
b. What is your return over the six-month period using information in (c) above?
only answer to B is needed.
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