Suppose you think AppX stock is going to appreciate substantially in value in the next yeaf

Say the stock's current price, $S_0,$ is $$100,$ and a call option expiring in one year has an everis?

price, $x,$ of $$100$ and is selling at a price, $C,$ of $$10.$ With $$10,000$ to invest, you are considering

three alternatives.

a$.$ Invest all $$10,000$ in the stock, buying $100$ shares.

b$.$ Invest all $$10,000$ in $1,000$ options $(10$ contracts$).$

c$.$ Buy $100$ options $($one contract$)$ for $$1,000,$ and invest the remaining $$9,000$ in a money market

fund paying $4\%$ annual interest.