Question
For this and next four questions, assume: You bought Stock A at a purchase price of: $25 Call option strike price: $25 Option expiration date:
For this and next four questions, assume:
You bought Stock A at a purchase price of: $25 Call option strike price: $25 Option expiration date: June 30, 2022 Price of call option: $5
Return (%) = 100 * (payoff purchase cost)/purchase cost
Express as positive or negative percent to nearest whole percent, e.g. -100% = -100
1) You bought only the stock, and not the call option.
What is the return on the stock (%) if you sell it when the stock goes up to 50?
2)You bought only the call option, and not the stock.
What is the return on the call option (%) if you sell it when the stock goes up to 50?
3) You bought only the stock, and not the call option.
What is the return on the stock (%) if you sell it when the stock goes down to $5?
4) You bought only the call option, and not the stock.
What is the return on the call option (%) if you sell it when the stock goes down to 5?
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