If a Call Option Is Purchased at a Premium of $200

question 83

Essay

If a call option is purchased at a premium of $200 with the current price of the stock at $25 per share and an exercise price of $28 per share,to what price would the stock need to increase to exercise the option and sell the stock to realize a gain of 250 percent on the option? Ignore taxes and brokerage commissions.
(a)$35
(b)$62.50
(c)$70
(d)$100

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Definitions:

Behavioral Response

The observable reaction or action of an individual following a stimulus or in a particular situation.

Verbal Response

A spoken or written reply or reaction to a question, statement, or situation.

Nonverbal Response

Communication without words, using gestures, facial expressions, and body language to convey a message or reaction.

Audience-centered

Refers to a communication approach that tailors the message based on the audience's needs, interests, and expectations.