Question
8. You have $5,000 to invest in shares of XYZ that currently trade at $50. You choose to invest 25% of your funds in long-term
8. You have $5,000 to invest in shares of XYZ that currently trade at $50. You choose to invest 25% of your funds in long-term call options with a strike of $60 that currently are quoted at $1.50. The options expire in 12 months. The other funds will be placed into a money market account earning 1.0%, compounded monthly. How much in dollars would the stock price have to increase in order for you to breakeven on this strategy?
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Financial Accounting and Reporting
Authors: Barry Elliott, Jamie Elliott
14th Edition
978-0273744535, 273744445, 273744534, 978-0273744443
