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Suppose you think Lucy Brewing Co. stock is going to appreciate substantially in value in the next year. The stock's current price, so, is $150,

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Suppose you think Lucy Brewing Co. stock is going to appreciate substantially in value in the next year. The stock's current price, so, is $150, and a call option expiring in one year has an exercise price, X, of $150 and is selling at a price, C. of $10. With $15,000 to invest, you are considering three alternatives. a. Invest all $15,000 in the stock, buying 100 shares. Invest all $15,000 in 1,500 options (15 contracts) c. Buy 100 options (one contract) for $1000, and invest the remaining $14,000 in a money market fund paying 5% in interest over 6 months (10% per year). What is the percentage rate of return for each alternative for the following 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, Bill + 100 options" answers to 2 decimal places.) Stock Price All stocks (100 shares) All options (1,500 options) Bills + 100 options Price of Stock 6 Months from Now $ 150 $ 160 $ 170 % % % % % % % %

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