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You would like to speculate on a rise in the price of a certain stock. The current stock price is $30, 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 $30, and a three-month call with a strike of $40 costs $3.00. You have $6,000 to invest. Identify two alternative strategies, one involving an investment in the stock and the other involving investing in the option. What are the potential gains and losses from each?
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