If evans purchases the call and the price of the stock


George Evans is currently bullish on the common stock of the Franklin Corporation. Franklin’s current price is $75 and a 3-month call with an exercise price of $75 is selling for $3. Ignore commissions and taxes. If Evans purchases the call and the price of the stock falls to $71 after 3 months, what kind of rate of return will he make?

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Financial Management: If evans purchases the call and the price of the stock
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