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Suppose you think Lucy Brewing Co. stock is going to appreciate substantially in value in the next rear. The stock's current price, so, is $200,

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Suppose you think Lucy Brewing Co. stock is going to appreciate substantially in value in the next rear. The stock's current price, so, is $200, and a call option expiring in one year has an exercise price, X. of $200 and is selling at a pre, C. of $10. With $20,000 to Invest, you are considering three alternatives. a. Invest all $20,000 in the stock, buying 100 shares. b. Invest all $20,000 in 2,000 options (20 contracts). c. Buy 100 options (one contract) for $1,000, and invest the remaining $19,000 in a money market fund paying 4% in interest over 6 months (8% 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 "o" 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 (2.000 options) Bills + 100 options Price of Stock 6 Months from Now 200 $ 210 $ 220 % % % % % % % % %

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