Return on Stock Options. Maryanne paid $401 for a call option on a stock. The option...
Return on Stock Options. Maryanne paid $401
for a call option on a stock. The option gives her the right to buy the stock for $54.25
per share until March 1st. On February 15th, the stock price rises to $61.29
per share, and Maryanne exercises her option.
What is Maryanne's return from this transaction?
(Hint: Ignore transaction costs.)
Maryanne's return from this transaction is____%
(Round to the nearest percent.)
Homework Answers
We see that the Return from the
transaction=(100*MAX(61.29-54.25,0))/401-1=75.56%
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Return on Stock Options. Maryanne paid $401
for a call option on a stock. The option...
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