Suppose You Purchase a Call Option for $4 and a Strike

question 50

Multiple Choice

Suppose you purchase a call option for $4 and a strike price of $30. On the expiration day, the price of the stock is $40. What is the return on the call option if you hold your position until maturity?

• A) 125%
• B) 130%
• C) 150%
• D) 170%

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Definitions:

Minimize

To reduce to the smallest possible amount or degree; to make something appear less important or significant.

Maximize

To increase something to its highest possible value or level.

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