Question: Please help i seem to be getting the wrong numbers. You have bought 1 share of stock for $31.28 and 3 call options on the
Please help i seem to be getting the wrong numbers.
You have bought 1 share of stock for $31.28 and 3 call options on the same stock. Each option has an exercise price of $40, cost $3.57 each, and expires in three months.
1. What is your profit from buying the stock (only) if the stock price is $20 in three months (in $)? Ignore the options for now.
2. What is your profit from buying the options (only) if the stock price is $50 in three months (in $)? Ignore the stock for now.
3. What is your total profit if the stock price is $100 in three months (in $)?
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