Question 2

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Question 2
(a) Intrinsic Value = S – K = $470 – $460 = $10
Therefore, the intrinsic value of the call option is $10.
(b) Rate of Return = ((New Option Price – Initial Option Price) / Initial Option Price) * 100
Rate of Return = (($28 – $21) / $21) * 100
Rate of Return = (7 / 21) * 100
Rate of Return …
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