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The price of ABC stock is currently $42 per share. ABC does not pay a dividend. You buy a six-month call on ABC, with a

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The price of ABC stock is currently $42 per share. ABC does not pay a dividend. You buy a six-month call on ABC, with a strike price of $45. The option cost $200. Ignore transaction costs and taxes. a. What holding period return do you expect on this call if in 6 months you expect it to rise to $50 ? b. What is your holding period return if you invest in ABC stock instead if stock price is still expected to be $50 in 6 months and you buy the stocks at its current price

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