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Tutorial 15026

WITH STEPS. 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 m...

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Question:

WITH STEPS. 

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? -$310.25 $1,689.75 $1,774.24 $1,862.95 $1,956.10

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