Problem $15-12($Static$)$

Suppose you think AppX stock is going to appreciate substantially in value in the next year. Say the stock's current price, $S_0,$ is $$100,$

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

Required:

a$.$ Calculate the value of the investment for stock price one year from now? $($Leave no cells blank $-$ be certain to enter $"0"$ wherever

required.$)$

Answer is complete but not entirely correct.