You would like to speculate on a rise in the price of ABC stock. ABC is currently trading at $29 and a 3-month call with a strike of 30 costs $2.9. You have $5,800 to invest. Identify two alternative strategies one involving an investment in the stock and the other an investment in calls on the stock.

a. What are the potential gains and losses from each?

b. Calculate the returns from each strategy if the stock price in 3 months is {$25, $27, $29, $30, $32, $33, $35}.

c. Graph your results.