Suppose you believe that Johnson Company's stock price is going to increase from its current...
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Finance
Suppose you believe that Johnson Company's stock price is going to increase from its current level sometime during the next 5 months. For $310.25 you can buy a 5 month call option giving you the right to buy 100 shares at a price of $25 per share. That means that for each option, the option price or premium is $3.1025. If you buy this option for $310.25 and Johnson's stock price actually rises to $45 what would your net pre-tax profit be?
a. -$310.25
b. $1,689.75
c. $1774.24
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