Which of the following is correct for the owner of a call option, valued at £5, on XYZ with a strike price of £65? XYZ currently trades at £55. 1. XYZ is expected to go to £65 per share 2. The option owner's current profit is £5 per share 3. It is not worth exercising this option 4. None of the above
Which of the following is correct for the owner of a call option, valued at £5, on XYZ with a strike price of £65? XYZ currently trades at £55. 1. XYZ is expected to go to £65 per share 2. The option owner's current profit is £5 per share 3. It is not worth exercising this option 4. None of the above
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:Which of the following is correct
for the owner of a call option,
valued at £5, on XYZ with a strike
price of £65? XYZ currently trades
at £55.
1. XYZ is expected to go to £65
per share
2. The option owner's current
profit is £5 per share
3. It is not worth exercising this
option
4. None of the above
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