You purchased a call option with a $17.35 strike price and a call premium of $.30. On the expiration date, the underlying stock was priced at $18.55 per share. What is the percentage return on your investment?
A)−100%
B)0%
C)125%
D)200%
E)300%

Question

Quizplus · Accepted Answer

The intrinsic value of the option at expiration is $18.55 - $17.35 = $1.20. The profit is $1.20 - $0.30 = $0.90. The percentage return is ($0.90 / $0.30) * 100% = 300%.

You Purchased a Call Option with a $17