Question
The price of a stock is $36 and the price of a three-month call option on the stock with a strike price of $36 is
The price of a stock is $36 and the price of a three-month call option on the stock with a strike price of $36 is $3.60. Suppose a trader has $3,600 to invest and is trying to choose between buying 1,000 options and 100 shares of stock. How high does the stock price have to rise for an investment in options to be as profitable as an investment in the stock?
| $40 |
| $39.6 |
| $36 |
| $48 |
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Risk Sharing Finance
Authors: Bakkali Mirakhor, Saad Abbas
1st Edition
3110590468, 978-3110590463
