The current price of a stock is $47, and three-month call options with a strike price...
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The current price of a stock is $47, and three-month call options with a strike price of $50 currently sell for $4.70. An investor who feels that the price f the stock will increase is trying to decide between buying 100 shares and buying 1,000 call options (10 contracts). Both strategies involve an investment of $4,700. What will be the profit/loss from.each strategy if a) the price rises to $60 b) Price goes down to $45? (25 points) The current price of a stock is $47, and three-month call options with a strike price of $50 currently sell for $4.70. An investor who feels that the price f the stock will increase is trying to decide between buying 100 shares and buying 1,000 call options (10 contracts). Both strategies involve an investment of $4,700. What will be the profit/loss from.each strategy if a) the price rises to $60 b) Price goes down to $45? (25 points)
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Lets calculate the profitloss for each strategy For the strategy of buying 100 s... View the full answer
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