1. A three-month call option with a strike price of $50 is currently trading at $5. The stock price is $50. An investor has $5000 to invest and is considering whether to buy 100 shares or buy 10 call option contracts. a. Assuming the investor buys 100 shares, compute the three-month return on investment if at the

   expiration date the stock price is $40, $50, or $60. b. Assuming the investor buys 10 call options, compute the three-month return on investment if at the

   expiration date the stock price is $40, $50, or $60. c. Based on the two strategies in part a, what can you say about financial leverage on the financial

   instruments?