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Suppose you buy a May expiration call option on 100 shares (@ $3.80) with the excise price of $140. a.) If the stock price in

Suppose you buy a May expiration call option on 100 shares (@ $3.80)

with the excise price of $140.

a.) If the stock price in May is $152, will you exercise your call? (Yes or No)

What is the net profit/loss on your position?

What is the rate of return on your position?

b.) What if you had bought an May put option on 100 shares with exercise price $140 at a price of ($2.71) instead? Would you exercise the put at a stock price of $140? Stock price stays the same ($152).

What is the net profit/loss on your position?

What is the rate of return on your position?

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