Which of the following is true? For choice (ii) to give a better result when the option matures, the share price must be above:

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 2Q: Two investors are evaluating General Electric’s stock for possible purchase. They agree on the...
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A stock market speculator can choose between (i) buying 1000 shares of
a certain stock for $80 per share, and (ii) buying 10, 000 European-style
call options on the stock with a strike price of $90 for $8 per option.
Which of the following is true? For choice (ii) to give a better result when
the option matures, the share price must be above:

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