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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
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 100 options (one contract) for $1,000, and invest the remaining $9,000 in a money market fund paying 4% 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. Page 69
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