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

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Suppose you think App stock is going to appreciate substantially in value in the next year. Say the stock's current price, Se, is $100, and a call option expiring in one year has an exercise price, X, of $100 and is selling at a price, C of $23. With $23,000 to Invest, you are considering three alternatives. a. Invest all $23,000 in the stock, buying 230 shares. b. Invest all $23,000 in 1,000 options (10 contracts). c. Buy 100 options (one contract) for $2,300, and invest the remaining $20,700 in a money market fund paying 5% in interest over 6 months (10% per year) What is your rate of return for each alternative for the following four stock prices in 6 months? (Leave no cells blank - be certain to enter"0" wherever required. Negative amounts should be indicated by a minus sign. Round the "Percentage return of your portfolio (Bills + 100 options)" answers to 2 decimal places.) The total value of your portfolio in six months for each of the following stock prices is: ces Price of Stock 6 Months from Now 80 $ 100 $ 110 $ 120 $ Stock Price All stocks (230 shares) All options (1.000 options) Bille+ 100 options The percentage return of your portfolio in six months for each of the following stock prices is: Price of Stock 6 Months from Now $ 100 S 110 $ 120 $ 80 % Stock Price All stocks (230 shares) All options (1,000 options) Bils + 100 options

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