You purchase one IBM July 90 call contract for a premium of $4. The stock has a 2 for 1 split prior to the expiration date. You

Question

3 years ago

15

You purchase one IBM July 90 call contract for a premium of $4. The stock has a 2 for 1 split prior to the expiration date. You

hold the option until the expiration date when IBM stock sells for $48 per share. You will realize a ______ on the investment. A. $300 profit B. $100 loss C. $400 loss D. $200 profit

Business

1 answer:

Jet001 [13] · Answer 1 · 2022-01-28T17:00:18+03:00

Jet001 [13]3 years ago

3 0

Answer:

$200 profit

Explanation:

Call profit

= $2 {0, [$48 - ($90/2)(100)]} - $400 = $200$