Question
Suppose you have $55,000 to invest. Youre considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $110 per share. You also notice that a
Suppose you have $55,000 to invest. Youre considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $110 per share. You also notice that a call option with a $110 strike price and six months to maturity is available. The premium is $5.5. MMEE pays no dividends. What is your annualized return from these two investments if, in six months, MMEE is selling for $118 per share? What about $106 per share?
| Annualized Return | Stock | Option |
| $118 per share | % | % |
| $106 per share | % | % |
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Theoretical Foundations For Quantitative Finance
Authors: Luca Spadafora, Gennady P Berman
1st Edition
9813202475, 978-9813202474
