A Speculator Purchased a Call Option with an Exercise Price

question 6

Multiple Choice

A speculator purchased a call option with an exercise price of $31 for a premium of $4. The option was exercised a few days later when the stock price was $34. What was the return to the speculator?

• A)25 percent
• B)- 25 percent
• C)- 3.2 percent
• D)- 2.9 percent