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:

Cultural Analysis

The examination and interpretation of the behaviors, values, and artifacts of a group to understand its cultural practices and norms.

Particular Organization

A specific entity or group organized for a certain purpose or activity.

Subcultural Groupings

Clusters within a larger culture that have their own distinct values, behaviors, and beliefs, often based on common interests or identities.

Broader Cultural Changes

Significant transformations in the values, norms, and practices of a society that affect multiple facets of life and institutions.