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You strongly believe that the price of Breener Inc. stock will rise substantially from its current level of $ 1 3 6 , and you
You strongly believe that the price of Breener Inc. stock will rise substantially from its current level of $ and you are considering buying shares in the company. You currently have $ to invest. As an alternative to purchasing the stock itself, you are also considering buying call options on Breener stock that expire in three months and have an exercise price of $ These call options cost $ each.
Calculate the threemonth rate of return on the stock strategy assuming that at the option expiration date Breener's stock price has increased to $ Do not round intermediate calculations. Round your answers to two decimal places.
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