After your analysis, you decided to purchase the option for $28.10, which gives you the...
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Finance
After your analysis, you decided to purchase the option for $28.10, which gives you the right to buy ABC Corp.'s stock at $14.00. If you exercise the option by purchasing the stock at the strike price, you could immediately sell the hare of the stock at its market price of $66.00. This will result in a payoff, and the rate of return will be?
True or False
1. An option's price will always be greater than (or equal to) its exercise price.
2. A call option's payoff (per share) equals the difference between the current stock price and the exercise price.
3. Options can be created and traded without an underlying asset.
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