Consider a stock priced at $60 with a standard deviation of .3. The risk-free rate is .05. There are put and call options available at exercise prices of 60 and a time to expiration of six months. The calls are priced at $5.77 and the puts cost $4.29. There are no dividends on the stock and the options are European. Assume that all transactions consist of 100 shares or one contract.

What is your profit if you buy a call, hold it to expiration and the stock price at expiration is $68?

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Answer rating: 100% (QA)

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