The call premium and put premium of the stock price

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A stock price is trading today at $100. The call premium and put premium is 10% of the stock price as of today. After our class of May 29th, you became interested in trading call and put options with an expiration of four months from now.

You bought 15 contracts of the call option of the above stock at a strike price of $110. The stock price goes up to $120 and you exercise your option. The annualized rate of return of this trade is %............

You sold only one contract of the above call option. The stock price goes down to $60. What is the net result of this deal in terms of profit or loss? The answer is $…………………

Reference no: EM131551591

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