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This example is part of Hedged Portfolios to minimize risk. Assume you have $9000 to invest; A stock is trading at $90.00. A call option
This example is part of "Hedged Portfolios" to minimize risk. Assume you have $9000 to invest; A stock is trading at $90.00. A call option that expires in one year with a strike price of $90.00 is trading at $10.00.
What is your portfolio's 1-year return if you invest in "Only Options" and the the stock price after one year is $115.00? Enter your answer in the following format: + or - 0.1234
Hint1: Answer is between 1.38 and 1.665
Hint2: +100% is same as 1, +50% is same as 0.5, -50% is same as -0.5, and -90% is same as -0.9
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