3. A call option has an exercise price of $100. At the exercise date, the stock price could be either $50 or $150. Which investment strategy provides the same payoff as the stock?<\/p>
<\/p>
A.<\/u><\/strong>Lend PV of $50 and buy two calls.<\/p> <\/u><\/strong><\/p> B. Lend PV of $50 and sell two calls.<\/p> <\/p> C. Borrow $50 and buy two calls.<\/p> <\/p> D. Borrow $50 and sell two calls.<\/p>",
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