The Price of ABC Shares Is Currently $42 Per Share

question 49

Multiple Choice

The price of ABC shares is currently $42 per share, but in six months you expect it to rise to $50. ABC does not pay a dividend. You buy a six- month call on ABC, with a strike price of $45. The option cost $200. What holding period return do you expect on this call? Ignore transaction costs and taxes.

• A) 200%.
• B) 150%.
• C) 250%.
• D) 300%.

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Definitions:

General Feeling

A broad, non-specific emotional state or attitude that an individual may have towards a particular idea or situation.

Too Much Pressure

Describes situations where an individual or system is subjected to stress or demands exceeding their capacity to handle, leading to potential negative outcomes.

Sources of Satisfaction

These are factors or elements within a job or work environment that contribute to an employee's job satisfaction, including aspects like pay, work-life balance, recognition, and opportunities for growth.

Workplace Fatalities

Deaths that occur in the course of employment, often due to accidents or occupational hazards.