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You have $5,000 to invest. You are considering two investment options. You can buy a stock that trades for $50 a share. You can buy
You have $5,000 to invest.
You are considering two investment options.
- You can buy a stock that trades for $50 a share.
- You can buy call options on that same stock for $1.25 with a strike price of $55.
Either way, you will invest all $5,000.
Use the information above to answer the following questions:
What is your dollar return if you invest $5,000 in the call option and the stock price at expiration is $45?
Answer should be formatted as a number with 2 decimal places (e.g. 99.99).
Please provide an excel formula
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