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Business, 31.03.2020 02:56 bxbykyah

Rick is considering the following alternatives for investing in D Industries, which is now selling for $44 per share:

(1) Buy 500 shares, and
(2) Buy six-month call options with an exercise price of 45 for $3.25 premium.

a. Assuming no commissions or taxes, what is the annualized percentage gain if the stock reaches $50 in four months and a call was purchased?

b. Assuming no commissions or taxes, what is the annualized percentage gain if the stock is at $30 in four months and the stock was purchased

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Answers: 1

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