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John paid a premium of GHC 4.00 per share for one 6-month call option (total of GHC 400.00 for 100 shares) of a GNTC corporation.
John paid a premium of GHC 4.00 per share for one 6-month call option (total of GHC 400.00 for 100 shares) of a GNTC corporation. At the time of the purchase GNTC stock was selling GHC 56.00 per share and the exercise price of the call option was GHC 55.00
a.Determine Johns profit or loss if the price of the GNTC stock is GHc 54.00
b.What is Johns profit or loss if the GNTC stock is GHc 62.00 when the option is exercised. (Ignore taxes and transaction costs).
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