Question
Suppose you have $40,000 to invest. Youre considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $50 per share. You also notice that a
Suppose you have $40,000 to invest. Youre considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $50 per share. You also notice that a call option with a strike price of $50 and six months to maturity is available. The premium is $2.5. MMEE pays no dividends. What is your annualized return from these two investments if, in six months, MMEE is selling for $55 per share? What about $46 per share? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
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