Suppose You Purchase a Call Option for $5 and a Strike

question 75

Multiple Choice

Suppose you purchase a call option for $5 and a strike price of $40. On the expiration day, the price of the stock is $55. What is the return on the call option if you hold your position until maturity?

• A) 125%
• B) 200%
• C) 275%
• D) 300%

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Definitions:

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