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2. Suppose you believe that AppX stock is going to appreciate substantially in value in the next year. Say the stock's current price is $100,

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2. Suppose you believe that AppX stock is going to appreciate substantially in value in the next year. Say the stock's current price is $100, and a call option expiring in one year has an exercise price of $100, and selling at price of $10. With $10,000 to invest, you are considering three alternatives a. Invest all $10,000 in stocks b. Invest all $10,000 in 10 option contracts (1 contract =100 options) C. Buy 1 contracts (100 options) for $1,000 and invest the remaining $9.000 n a money fund paying 4% annual interest rate 1) Please show your possible value of three portfolios for the four stock prices at $80, $100, $110, and $120 in one year 2) Please show your return rate for these four stock prices in one year (The format of your answer should be similar to PPT slides)

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