72 ) MGT 2100 - Final Review- You are expecting the current stock price to increase in the near future. The stock currently trades for $23 per SH. A call option with a price (strike price) of $25 can be purchased for $4.60 per share at this particular time. You have $4,600 to invest.

a) What are your two alternative investment strategies for the $4,600 (one in the stock and the other in call options)? Assume all of this money must be invested in either stock or options for this question.

b) What will your profit ($) for the stock strategy be if the price of the stock on the expiration date is $31 per share?

c) What will your profit ($) to the option strategy be if the price of the stock on the expiration date is $31 per share?

d) What underlying asset price do you break even on the option strategy?