An investor is considering buying 575 shares of ABC Company at $36 per share. Analysts agree that the firm's stock price may increase to $45 per share in the next four months. As an alternative, the investor could purchase a 120-day call option at a striking price of $30 for $5,000. 

What profit would the investor realize if the stock price increased to $42 per share?

Answer rating: 100% (QA)

Solution We need to find the profit of the investor Buying 575 shares at 36 per share Cost of pu... View the full answer