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Suppose you have $40,000 to invest. Youre considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $80 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 $80 per share. You also notice that a call option with a $80 strike price and six months to maturity is available. The premium is $4. MMEE pays no dividends. What is your annualized return from these two investments if, in six months, MMEE is selling for $86 per share? What about $76 per share?
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