What is your dollar profit and percentage return

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Reference no: EM131184982

You can buy a 6-month call contract (i.e., for 100 shares) with an exercise price of $65 for a cost of $2.10 *100. Assume the risk-free rate of return is 0%.

a. What is your dollar profit (loss) and percentage return if you purchase one call contract, and in 6 months ABC stock is selling for $85?

b. What is your dollar profit (loss) and percentage return if you purchase one call contract, and in 6 months ABC is selling for $45?

c. What is your dollar profit (loss) and percentage return if you purchase one call contract, and in 6 months ABC is selling for $25?

Reference no: EM131184982

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