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Table 1.5 Comparison of profits from two alternative strategies for using $2,000 to speculate on a stock worth $20 in October Speculator's strategy December stock

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Table 1.5 Comparison of profits from two alternative strategies for using $2,000 to speculate on a stock worth $20 in October Speculator's strategy December stock price $15 $27 Buy 100 shares Buy 2,000 call options -$500 -$2,000 $700 $7,000 1. Redraw table 1.5 and figure 1.5 in chapter 1 of the textbook for the case where you compare the purchase of 100 shares of stock to the purchase of 200 call options (not 2000). In particular compute precisely the stock price at maturity for which the profit is the same for both strategies (the stock price where the dotted line crosses the solid line). Use the same data as in the book except for the different number of call options. Table 1.5 Comparison of profits from two alternative strategies for using $2,000 to speculate on a stock worth $20 in October Speculator's strategy December stock price $15 $27 Buy 100 shares Buy 2,000 call options -$500 -$2,000 $700 $7,000 1. Redraw table 1.5 and figure 1.5 in chapter 1 of the textbook for the case where you compare the purchase of 100 shares of stock to the purchase of 200 call options (not 2000). In particular compute precisely the stock price at maturity for which the profit is the same for both strategies (the stock price where the dotted line crosses the solid line). Use the same data as in the book except for the different number of call options

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