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Suppose you think Apple stock is going to appreciate substantially in value in the next year. Say the stock's current price, Sp. is $125, and

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Suppose you think Apple stock is going to appreciate substantially in value in the next year. Say the stock's current price, Sp. is $125, and a call option expiring in one year has an exercise price, Xof $125 and is selling at a price, C. of $13. With $39,000 to invest, you are considering three alternatives. a. Invest all $39,000 in the stock, buying 312 shares. b. Invest all $39,000 in 3,000 options (30 contracts) C. Buy 100 options (one contract) for $1.300, and invest the remaining $37700 in a money market fund paying 4% in interest over 6 months (8% 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 "o" 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: Price of Stock 6 Months from Now 105 $ 125 $ 135 $ $ 145 Stock Price Alstocks (312 shares) Al options (3.000 options) Bils + 100 options The percentage return of your portfolio in six months for each of the following stock prices is: 5 105 Price of Stock 6 Months from Now $ 125 $ 135 % % $ 145 % Stock Price All stocks (312 shares) All options (3.000 options) Bille+ 100 options

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