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e current price of a stock is $94, and three-month call options wit strike 595 currently sell for $4.70. An investor who feels that the
e current price of a stock is $94, and three-month call options wit strike 595 currently sell for $4.70. An investor who feels that the price of the stock will increase is trying to decide between buying 100 shares and buv 2.000 call options (20 contracts). Both strategies involve an investmen $9.400. a) What is the total gain for each strategy if the stock price at maturity is $115? b) What is the total loss if the stock price is $92 at maturity? c) How high does the stock price have to rise for the option strategy to be more profitable? d) Draw a diagram showing how the profits of these two alternative strategies depends on the stock price in 3 months. e) What advice would you give to this investor
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