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.)
Homework Answers
We see that the Return from the
transaction=(100*MAX(73.12-43.19,0))/253-1=1083.00%
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Return on Stock Options. Teresa purchased a call option on a stock for $253. The option allows her to purchase the sto...
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