An investor owns a call option on 100 shares of xyz stock, Finance Basics

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An investor owns a call option on 100 shares of xyz stock

Question: An investor owns a call option on 100 shares of XYZ stock with a strike price of $25.

a. Does the investor exercise the option if on the day the option expires the price of the stock is $30 per share?

b. What is the cash flow on the day the option expires if the price of the stock is $30 per share?

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Finance Basics: An investor owns a call option on 100 shares of xyz stock

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Finance Basics: An investor owns a call option on 100 shares of xyz stock

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