Question

Return on Stock Options.  Teresa purchased a call option on a stock for ​$253. The option allows her to purchase the sto...

Return on Stock Options.  Teresa purchased a call option on a stock for ​$253.

The option allows her to purchase the stock for $43.19

per share if she exercises the option by December 31st. On December​ 15th, the stock rises to ​$73.12

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.)

0 0
Add a comment Improve this question Transcribed image text
Answer #1

We see that the Return from the transaction=(100*MAX(73.12-43.19,0))/253-1=1083.00%

Add a comment
Know the answer?
Add Answer to:
Return on Stock Options.  Teresa purchased a call option on a stock for ​$253. The option allows her to purchase the sto...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT