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Nico Yong Is Considering the Purchase of 100 Cisco Systems

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Nico Yong is considering the purchase of 100 Cisco Systems shares at $22 per share. Because the economy is picking up, Nico believes the demand for Oracle's router systems will increase substantially causing the price of Cisco's shares to increase to $30 per share. As an alternative, Nico is considering the purchase of a call option for 100 shares of Cisco at with an exercise price of $25. This 180 day option will cost Nico $200. Ignore transaction costs and dividends. What will Nico's profit be on the share transaction if he decides to buy the stock and its price does increase to $30 per share and he sells?

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Definitions:

Small Intestine

A part of the gastrointestinal tract between the stomach and large intestine that digests food and absorbs nutrients.

Cecum

The first part of the large intestine, located at the junction between the intestines and the appendix.

Jejunum

The second part of the small intestine in humans, where most of the nutrients from food are absorbed.

Duodenum

The first section of the small intestine, immediately following the stomach, where initial digestion of food takes place.

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