You can buy a 6-month call contract (i.e., for 100 shares) with an exercise price of $65 for a cost of $2.10 *100. Assume the risk-free rate of return is 0%.
a. What is your dollar profit (loss) and percentage return if you purchase one call contract, and in 6 months ABC stock is selling for $85?
b. What is your dollar profit (loss) and percentage return if you purchase one call contract, and in 6 months ABC is selling for $45?
c. What is your dollar profit (loss) and percentage return if you purchase one call contract, and in 6 months ABC is selling for $25?