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Callie Purchased 3 Call Options with a $37

question 85

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Callie purchased 3 call options with a $37.50 strike price and a call premium of $.90. On the expiration date, the underlying stock was priced at $40.20 per share. What is her percentage return on this investment?


Definitions:

Discount Rate

The applied rate in discounted cash flow studies for turning future cash flows into their equivalent present-day financial value.

Cash Inflows

Money received by a business from its operations, investments, or financing activities.

Discount Factor

A multiplier used to calculate the present value of future cash flows; reflects the time value of money.

Invested Today

Refers to the allocation of resources, such as capital or time, in the present with the expectation of future returns.

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