Question: A call option. On Nov 3 , 2 0 2 3 , Kraft Heinz Company stock ( KHC ) was trading at $ 3 3

A call option. On Nov 3,2023, Kraft Heinz Company stock (KHC) was trading at $33 per
share. On that day, you purchased a call option with a strike price of $31. The option expires on Nov
4,2024(a one-year expiration). The premium (the cost) for you to buy that option was $5. Suppose
that on Nov 4,2024, the market price of KHC is $38. You exercise the option on that day. What is
your rate of return? Method: hand calculations. Yes, you can use a calculator.

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