1. Suppose an investor believes that a share, currently selling at 10, will go up significantly over the next three months. The current futures price for a three month delivery of the share is 11; entering this contract from either position requires a 1 deposit. A three month European call option on the share with strike price 12 is currently trading at 75p. The investor has 750 of available capital. (a) Outline three different investment strategies suited to the investor's belief. [3 marks (b) Suppose the share price is 8 or 15 after three months. For both cases, calculate the profit or loss for each strategy: you may neglect the time value of money. Comment on the (4 marks) nature of the risk-to-return relationship in each of the strategies