Question
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's the average percent return for the stock investment?
Answer should be formatted as a percent with 2 decimal places (e.g. 99.99).
What's the average percent return for the option investment?
Answer should be formatted as a percent with 2 decimal places (e.g. 99.99).
What's the standard deviation of returns for the stock investment?
Answer should be formatted as a percent with 2 decimal places (e.g. 99.99).
What's the standard deviation of returns for the option investment?
Answer should be formatted as a percent with 2 decimal places (e.g. 99.99).
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