Ollie Lloyd, a UK resident, bought five option contracts to speculate on price movements of BT stock.

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Ollie Lloyd, a UK resident, bought five option contracts to speculate on price movements of BT stock. Each contract is worth 1,000 shares of the stock and costs £0.35 (Pound sterling), so he paid £1,750 in total. After five months, he sold the five contracts for a total of £2,250. Assuming he is in the basic rate tax bracket of 20% and capital gains are taxed at this rate in the United Kingdom, what are his pretax and after-tax HPRs on this transaction?

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Fundamentals Of Investing

ISBN: 9780135175217

14th Edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

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