I'll use INTEL stock INTC which closed today at S(t)=$44.28 per share. Your boss considers buying 1,000 shares of Intel, so he would commit $44,280 towards that purchase. You have access to Long Term Puts and Calls on INTC, pretty liquid... those expiring in T=Jan 2023 were traded as shown in the Table on the following page. The market rate of interest is 3% per annum w monthly compounding. Assume Jan2023 is 27 months from now.

a) Draw the TV of his position in Intel if he buys 20 contracts w K=55 and puts the balance from his commitment into an interest bearing account, and compare that with his plan to buy 1,000 shares, and find the break even points.

b) Repeat (a) but use the K=70 calls.

c) Now suppose you spent the same total dollar amount on options as in part a., but you used that amount to buy K=70 calls. You can round the number of K=70 calls bought to the nearest 100. As in both parts a. and b. compute the range of prices where an outright stock purchase dominates your outcome.

d) What other differences might your boss face as a retail investor if he considered one of a, b, or c as an alternative?