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You purchase one IBM March 70 call option for a premium of $6. Ignoring transaction costs,...

You purchase one IBM March 70 call option for a premium of $6. Ignoring transaction costs, what would be your profit when stock price is equal to $70 or $80 at expiration?

a. -$6, $0

b. -$6, $4

c. $4, $10

d. $10, $20

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Answer #1

strike Price = k = 70 Co= 6 S= Stock Price of expiration = 70 Profit = (s-k) - Co = To To - 6 = -6 Ans Again s= stock price o

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