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If the call is exercised the gross profit is $51 45 = $6. The net profit is $6 3.45 = $2.55. The holding period return
- If the call is exercised the gross profit is $51 45 = $6. The net profit is $6 3.45 = $2.55. The holding period return is $2.55/$3.45 = .739 (73.9%). If the call is not exercised, there is no gross profit and the investor loses the full amount of the premium. The return is ($0 3.45)/$3.45 = 1.00 ( 100%).
please show calculations
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