Question 3 please

1. (6 points) The current market price for a share of common stock is $70. An investor buys a call option with a strike price of $75. The call premium is $750. If the market price of the stock moves to $90 per share, the investor will exercise his/her option. The investor then sells the shares on the open market for $90. What is the investor's profit or loss? a. $2,000 b. $-735 C. $750 d. $-500 2. (6 points) Regarding the problem above (1), what is the total return on investment? a. 400% b. 500% c. 100% d. 200% 3. (6 points) Rather than buying the option in problem 1 above, the investor might have simply purchased 100 shares of stock directly in the market place. At a price of $70 per share, the cost of 100 shares would have been $7,000. If the share price had risen to $90, what is/would have been the total return on investment? a. 50.22% b. 28.57% c. 22.22% d. 60.35%