Question
You would like to speculate on a rise in the price of a certain stock. The current stock price is RM25, and a three-month call
You would like to speculate on a rise in the price of a certain stock. The current stock price is RM25, and a three-month call option with a strike price of RM30 costs RM2.5. You have RM1,000 to invest. Identify two alternative strategies, one involving an investment in stock and the other involving investment in option. What are the potential gain and losses from each?
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Investments
Authors: William F. Sharpe, Gordon J. Alexander, Jeffery V. Bailey
6th Edition
8120321014, 978-8120321014
