You spend $1,000 to buy 100 call options on IBM stock (expires after one year; each covers one share) with $100 strike price and spend $9,000 to buy T-bills with 2% annual interest rate. If stock price increases to $115, your one year rate of return would be?

Answer rating: 100% (QA)

To calculate the oneyear rate of return we need to consider the gains or lo... View the full answer