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Suppose you think WW stock is going to appreciate substantially in value over the next six months. The stock's current price is $115 and the
Suppose you think WW stock is going to appreciate substantially in value over the next six months. The stock's current price is $115 and the call option expiring in six months has an exercise price, X, of $95 and is selling at a premium (option price), C, of $14. You invest $14,000 on 1,000 options (10 contracts, each for 100 shares). If the stock price six months from now is $90, your rate of return is closest to: \begin{tabular}{l} \hline 79% \\ \hline100% \\ \hline 43% \\ \hline 7% \end{tabular}
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