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Problem #1) Mr. Jones believes that Disney's common stock will increase in value over the next six months. Unfortunately, he does not have enough cash
Problem #1) Mr. Jones believes that Disney's common stock will increase in value over the next six months. Unfortunately, he does not have enough cash in his portfolio to purchase enough shares to make a significant profit. To avoid this significant capital investment, Mr. Jones decides to purchase 10 Disney Call Options due in six months. The price he pays is $5 per option contract. The strike price of the options are $155. Disney common stock is currently trading at $150 per share. Answer the following: 3) The day the options are due to expire, Disney common stock is trading at $157 per share. What should Mr. Jones do with the options? (Hint: Exercise, Sell, or let the options Expire) A. Let the Options Expire Exercise the Options B. C.Sell the Options
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