Question
Redraw for the case where you compare the purchase of 100 shares of stock to the purchase of 200 call options (not 2000). In particular,
Redraw for the case where you compare the purchase of 100 shares of stock to the purchase of 200 call options (not 2000). In particular, compute precisely the stock price at maturity for which the profit is the same for both strategies (the stock price where the dotted line crosses the solid line). Use the same data as in the book except for the different number of call options. The tables are provided below
Figure 1.5 Profit or loss from two alternative strategies for speculating on a stock currently worth $20. 10000 Profit ($) 8000 6000 4000 2000 Buy shares Buy options 0 15 20 25 30 Stock price ($) -2000 -4000
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Contemporary Engineering Economics
Authors: Chan S. Park
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136118488, 978-8120342095, 8120342097, 978-0136118480
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