vill T 3 3 3 3 #Ups 3 2 1 0 #Down 0 1 2 3 S3 $337.5000 $150.0000 $66.6667 $29.6296 Probability 8.3% 32.2% 41.6% 17.9% 100.0% Exercise? Yes Yes No No Long Call Strike $125 Sell Buy $337.50 $125.00 $150.00 $125.00 $0.00 $0.00 $0.00 $0.00 Sell Buy Payoff Average or expected value 76.2189912 50,565536 25.6534552 Present expected value 69.7511741 46.2746285 23.4765456 Premium 23.4765 1. This question illustrates the leverage benefit of using options. A. An investor has $1 million to invest. How many shares of stock can they purchase, and what is the profit if the spot share price moves from $100 to $337.50? Payoff $212.50 $25.00 $0.00 $0.00 I One million dollars can buy 10,000 shares of stock. If each share increases from $100 to $337.50, then the portfolio's value rises from $1 million to $3.375 million. One million dollars can buy 42,596 (rounded) options. Each option pays off $212.50 or $9,051,605 in total. The investor made $8,051,605 or 805% on their investment. The investor made $2.375 million or 237.5% on t