Suppose an investor bought a call option for $3

Subject:FinancePrice:2.86 Bought5

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Suppose an investor bought a call option for $3.45 on a single share of loud sound Recording Inc. with a strike price of $40.00 when the firm’s stock traded at $42.35. The call option had one year until expiration. One year later, the stock price had increase to $44.95. The stock price had therefore increased by 6.21%, and an investor who bought the stock and held it for a year would have earned 6.21%. What return did this investor earn by buying the call option?

A. 46.57%

B. 37.70%

C. 44.35%

D. 39.92%