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Return on Stock Options. Teresa purchased a call option on a stock for $250. The option allows her to purchase the stock for S40.00 per
Return on Stock Options. Teresa purchased a call option on a stock for $250. The option allows her to purchase the stock for S40.00 per share if she exercises the option by December 31st. On December 15th, the stock rises to $30.00 per share and Teresa exercises the option. What is Teresa's return? (Hint Ignore transaction costs.) Teresa's return is %. (Round to the nearest percent.)
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