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You purchase 18 call option contracts with a strike price of $100 and a premium of...

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Finance

You purchase 18 call option contracts with a strike price of$100 and a premium of $2.85. Assume the stock price at expirationis $112.00.

a. What is your dollar profit? (Do notround intermediate calculations.)

b. What is your dollar profit if the stockprice is $97.95? (A negative value should be indicated by aminus sign. Do not round intermediate calculations.)

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4.0 Ratings (695 Votes)
a Value of call option at expiry max 0 spot at expiry strike price Value of call option at expiry max 0 112 100 max 012 12 Profit per option value of option at expiry    See Answer
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Transcribed Image Text

You purchase 18 call option contracts with a strike price of$100 and a premium of $2.85. Assume the stock price at expirationis $112.00.a. What is your dollar profit? (Do notround intermediate calculations.)b. What is your dollar profit if the stockprice is $97.95? (A negative value should be indicated by aminus sign. Do not round intermediate calculations.)

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