to gan at expiration Apple stock sells for £55, then the option holder could acquire the Apple share atE (a)and can sell it at 0L

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
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D3
Fa (a) and (b)
Consider an Apri 2021 maturity call option on a share of Appie with an exorcise price of E50 per share selling on 3 January 2021.
at expiration Apple stock solls for £55, then the option holder could acquire the Apple share at (a) and can sell it atE b to gain
proft
() 55 (b) 50
O(a) 50, b) 50
O ) 50. b) 55
6a55.b) 55
Transcribed Image Text:Fa (a) and (b) Consider an Apri 2021 maturity call option on a share of Appie with an exorcise price of E50 per share selling on 3 January 2021. at expiration Apple stock solls for £55, then the option holder could acquire the Apple share at (a) and can sell it atE b to gain proft () 55 (b) 50 O(a) 50, b) 50 O ) 50. b) 55 6a55.b) 55
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