A call option is purchased for a premium of 400 the current


A call option is purchased for a premium of $400. The current price of the stock is $42 per share and the exercise price is $44 per share. The option is exercised when the stock is selling for $50 per share. What would be your return on the option if after exercising it, you immediately sold the stock at the market price of $50 per share? Ignore taxes and brokerage commissions. Please show steps.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: A call option is purchased for a premium of 400 the current
Reference No:- TGS01452319

Expected delivery within 24 Hours