Ted buys 10 CALL option contracts Each contract consists of 100 shares Exercise price $10.00 per share;

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Ted buys 10 CALL option contracts

Each contract consists of 100 shares

Exercise price $10.00 per share; Premium $0.75 per share; Spot price at expiry $12.00 per share.

a)How much does it cost to purchase the 10 contracts? (ignoring brokerage costs)

b) Assuming Ted exercises the options, how much will it cost to buy the underlying shares?

c) Calculate Ted's profit.

Related Book For answer-question

Smith and Roberson Business Law

ISBN: 978-0538473637

15th Edition

Authors: Richard A. Mann, Barry S. Roberts

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Posted Date: May 12, 2023 01:45 AM

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Ted buys 10 CALL option contracts Each contract consists of 100 shares Exercise price $10.00 per share;

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a Ted buys 10 option contracts and each contract consists of 100 shares so Ted is buying a total of ... View the full answer

Smith and Roberson Business Law

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