What would your pre-tax net profit be, Finance Basics

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What would your pre-tax net profit be

Problem

Suppose you believe that Bisso Inc.'s stock price is going to increase from its current level of $25.50 sometime during the next 5 months. For $3.10 you can buy a 5-month call option giving you the right to buy 1 share at a price of $25 per share. If you buy this option for $4.10 and Bisso's stock price actually rises to $32, what would your pre-tax net profit be?

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Finance Basics: What would your pre-tax net profit be

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