15. The current share price of company DNPD is $50. The price of European call option on one DNPD share with exercise date 18 December and exercise price $51 is $5. Today, Mr A invests $100 to buy shares of the company and Mr B invests $100 to buy call options. On the exercise date 18 December, the share price is $58. What is the profit/loss in dollars to Mr A and Mr B? Select one: a. Mr A profit = $8, Mr B profit = $20 O b. Mr A profit = $16, Mr B profit = $20 c. Mr A profit = $16, Mr B profit = $40 %3D d. Mr A profit = $8, Mr B profit = $40 %3D
15. The current share price of company DNPD is $50. The price of European call option on one DNPD share with exercise date 18 December and exercise price $51 is $5. Today, Mr A invests $100 to buy shares of the company and Mr B invests $100 to buy call options. On the exercise date 18 December, the share price is $58. What is the profit/loss in dollars to Mr A and Mr B? Select one: a. Mr A profit = $8, Mr B profit = $20 O b. Mr A profit = $16, Mr B profit = $20 c. Mr A profit = $16, Mr B profit = $40 %3D d. Mr A profit = $8, Mr B profit = $40 %3D
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:15. The current share price of company DNPD is $50. The price of European call option on one DNPD share with exercise date 18
December and exercise price $51 is $5. Today, Mr A invests $100 to buy shares of the company and Mr B invests $100 to buy call
options. On the exercise date 18 December, the share price is $58. What is the profit/loss in dollars to Mr A and Mr B?
Select one:
a. Mr A profit = $8, Mr B profit = $20
%3D
b. Mr A profit = $16, Mr B profit = $20
%3D
c. Mr A profit = $16, Mr B profit = $40
d. Mr A profit = $8, Mr B profit = $40
%3D
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