Home / Questions / It is January 1 and Bobitronics Inc. (BOB) stock is currently trading at $97.97. There is

It is January 1 and Bobitronics Inc. (BOB) stock is currently trading at $97.97. There is

It is January 1 and Bobitronics Inc. (BOB) stock is currently trading at $97.97. There is a May call option on BOB's stock with a strike price of 110. The option is currently trading at $2.88. Assume that the stock increases in value to $115.14 shortly before expiration. Calculate the percentage rate of return under the following 2 scenarios: a) you buy the stock today at $97.97 and then sell it at $115.14, and b.) you buy the May 110 call contract at $2.88, exercise the option, and then sell the stock for $115.14. Assume that you can exercise and sell the stock simultaneously with no transaction costs.

Dec 04 2019 Read more Less More

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