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the first part is completed. please solve the second part and use the numbers for the stock price that are provided. 35, 40, 50 and
the first part is completed. please solve the second part and use the numbers for the stock price that are provided.
Suppose you think AppX stock is going to appreciate substantially in value in the next year. Say the stock's current price, 50 . is $40, and a call option expiring in one year has an exercise price, X, of $40 and is selling at a price, C, of $14, With $12,600 to invest, you are considering three alternatives. a. Invest all $12,600 in the stock, buying 315 shares. b. Invest all $12,600 in 900 options (9 contracts). c. Buy 100 options (one contract) for $1,400, and invest the remaining $11,200 in a money market fund paying 5% in interest over 6 months (10\% per year). What is your rate of return for each alternative for the following four 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 (Bills +100 options)" answers to 2 decimal places.) The total value of your portfolio in six months for each of the following stock prices is: The percentage return of your portfolio in six months for each of the following stock prices is 35, 40, 50 and 60. thank you.
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