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Suppose you believe that Johnson Company's stock price is
going to increase from its current level of $22.50 sometime during the
next 5 months. For $310.25 you can buy a 5-month call option giving
you the right to buy 100 shares at a price of $25 per share. If you buy
this option for $310.25 and Johnson's stock price actually rises to $45,
what would your pre-tax net profit be?
Question 14
2 out of 2 points
Which of the following statements is CORRECT?
Question 15
Suppose you believe that Delva Corporation's stock price is
going to decline from its current level of $82.50 sometime during the
next 5 months. For $510.25 you could buy a 5-month put option giving
you the right to sell 100 shares at a price of $85 per share. If you bought
this option for $510.25 and Delva's stock price actually dropped to $60,
what would your pre-tax net profit be?