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The following table lists prices of Amazon options in January 2018 when Amazon stock was selling for $1,300. Expiration Date Exercise Price Call Price Put

The following table lists prices of Amazon options in January 2018 when Amazon stock was selling for $1,300.

Expiration Date Exercise Price Call Price Put Price
April 2018 $ 1,200 $ 132.70 $ 31.10
1,300 73.20 70.10
1,400 33.00 134.20
July 2018 $ 1,200 $ 161.70 $ 53.55
1,300 104.00 96.00
1,400 62.55 156.05
January 2019 $ 1,200 $ 210.00 $ 88.05
1,300 155.35 133.25
1,400 112.00 190.00

Suppose that by January 2019, the price of Amazon could either rise from its January 2018 level to $1,300 1.28 = $1,664.00 or fall to $1,300/1.28 = $1,015.63.

a. What would be your percentage return on a January expiration call option with an exercise price of $1,300 if the stock price rose? (Round your answer to 2 decimal places.)

b. What would be your percentage return if the stock price fell? (Negative value should be indicated by a minus sign.)

c. Which is riskier: the stock or the option?

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