Exam 21: Option Applications and Corporate Finance

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Suppose you purchase a call option for $5 and a strike price of $20. On the expiration day, the price of the stock is $30. What is the return on the call option if you hold your position until maturity?

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The value of a call option ________ with the risk-free rate, and the value of a put option ________ with the risk-free rate.

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