Tools Keep the Highes/2 6. Options and leverage A-Z Part of the appeal of purchasing option is that they allow investors to gain a high degree of personage when buying series. The leverage increases risk, which means the potential upside and downside of the investment are both amplied. Suppose an investor bought a cal option for 53.45 on a single share of Lunardi Harnes Corp, with a strike price of 540.00 when the firm's stock trand 342.35. The call option had one year until expiration. One year later the stock price had increased to 144.98. The stock price had therefore increased by 6.21%, and an investor who bought the stock and held it for a year would have earned 6.21 What return did this investream by buying the call option? 5 51.00 story w 4657 42.13% 44359 Suppose the stock price had fallen to $38.99. In the following table, indicate the return that a stock investor would have earned by holding Lunardi Harries Corps stock. Then indicate the return that an investor would have earned she had bought a callation on Lunar Harriers Corps stock fi Return on stock Return on call option Tools Keep the Highes/2 6. Options and leverage A-Z Part of the appeal of purchasing option is that they allow investors to gain a high degree of personage when buying series. The leverage increases risk, which means the potential upside and downside of the investment are both amplied. Suppose an investor bought a cal option for 53.45 on a single share of Lunardi Harnes Corp, with a strike price of 540.00 when the firm's stock trand 342.35. The call option had one year until expiration. One year later the stock price had increased to 144.98. The stock price had therefore increased by 6.21%, and an investor who bought the stock and held it for a year would have earned 6.21 What return did this investream by buying the call option? 5 51.00 story w 4657 42.13% 44359 Suppose the stock price had fallen to $38.99. In the following table, indicate the return that a stock investor would have earned by holding Lunardi Harries Corps stock. Then indicate the return that an investor would have earned she had bought a callation on Lunar Harriers Corps stock fi Return on stock Return on call option
