Answer:
Explanation:
Profit on exercise of call option = Price of stock as at expiry - strike price
=43-35 =8$
Net profit = (Profit on exercise of call option-Premium paid) * Contract size
=(8-6)*100 = 2*100 =200$
Payoff is $200
Answer:
$ 200
Step by Step Explanation:
Call holder exercises price of GE stock -
four-month GE call option
$43- $34=$8
Profit on exercise of call option is $8
Profit on exercise of call option-Premium paid ×Contract size = Net profit
$8- $6= $2
$2×100 = $ 200
Therefore the payoff to the call holder is $200
