An investor purchases a three-month european call option on, Ask an Expert

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An investor purchases a three-month European call option on the market index with an exercise price of $1000 for a premium of $10. After three months, the market index spot price is $1011 and the investor’s position is closed. Find the rate of return earned by the investor, expressed as the effective annual rate of return.

A. 10.00% B. 33.10% C. 46.41% D. 77.16% E. 113.84%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91788349

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