Question: You have a call option which expires today relating to 1,000 shares in Drum Software. The strike price of the option is $70 per share.

You have a call option which expires today relating to 1,000 shares in Drum Software. The strike price of the option is $70 per share. The option premium was $8 per share. Assuming that the current price per share of Drum Software on the stock market is $75, would you exercise Page6of12See next page Course ID: 102701the option, and what would be your net profit or loss from having purchased this option?

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