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can you please do the diagram #3. (1.5pt.) Suppose you think AppX stock is going to appreciate substantially in value in the next year. Say
can you please do the diagram
\#3. (1.5pt.) Suppose you think AppX stock is going to appreciate substantially in value in the next year. Say the stock's current price, S0, is $100, and a call option expiring in one year has an exercise price, X, of $100 and is selling at a price, C, of $10. With $10,000 to invest, you are considering three alternatives. a. Invest all $10,000 in the stock, buying 100 shares. b. Invest all $10,000 in 1,000 options ( 10 contracts). c. Buy 200 options (two contracts) for $2,000, and invest the remaining $8,000 in a money market fund paying 3% annual interest. What is your rate of return for each alternative for the following four stock prices in one year? Summarize your results in the table and diagram below Step by Step Solution
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