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6. Suppose you thi nk Apple stock is going to appreciate substantially in value in the next yedl Say the stock's current price, So, is

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6. Suppose you thi nk Apple stock is going to appreciate substantially in value in the next yedl Say the stock's current price, So, is $100, and a call option expiring in one year price, X, of S100 and is selling at a price, C, of $10. With $10,000 to invest, you are con considering si three alternatives. a. Invest all $10,000 in the stock, buying 100 shares. b. Invest all S10,000 in 1,000 options (10 contracts). c. Buy 100 options (one contract) for $1,000, and invest the remaining $9,000 in a money m fund paying 4% annual interest. What is your rate of return for each alternative for the following four stock prices in one year? e your results in the table and diagram below. Price of Stock One Year from Now $80 $100 $110 $120 o. All stocks (100 shares) b. All options (1,000 shares) c Bills +100 options s, gg range for

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