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You bought a share of Gamestop (Tick: GME) today for $100. You plan to sell it in one year. You foresee two possible scenarios for
You bought a share of Gamestop (Tick: GME) today for $100. You plan to sell it in one year. You foresee two possible scenarios for the price in one year: 1) Rocket Ship; or 2) GUH. If GME is a Rocket Ship you expect to sell for $410. If GUH, then you will sell for $41. The two scenarios are equally likely. What is your expected return? (Express your answer in percentage form rounded to one decimal place.) Apple Inc. call options with a strike price of $245 are trading at a premium of $12. Apple shares are trading for $260 per share. Assume one share per option contract and assume that the options are American. To take advantage of this option price you should: 1. Buy a share of Apple II. Buy a call option III. Sell a call option IV. Exercise the call option V. Sell a share of Apple 1) ll then III 2) I then Ill then IV 3) 1 then II then IV 4) ll then IV then V
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