Question
Johanna places a combination trade as follows: she buys one share of VanHoutte long for $ 10.80 and at the same time she buys a
Johanna places a combination trade as follows: she buys one share of VanHoutte long for $10.80 and at the same time she buys a call on VanHoutte that has an exercise price of $10.30 and a premium of $1.60. What is the profit or loss on the TWO trades COMBINED if at the time of expiration of the call option VanHoutte is trading at $12.50 per share? Assume that she gets out of her long position at the same time her option expires. $ Place your answer with dollars and cents without a dollar sign. Enter negative answers with a "minus" sign. For example, if your answer is negative two dollars and seventy five cents, then enter -2.75.
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