# Suppose you think AppX stock i

Suppose you think AppX stock is going to appreciate substantially in value in the next year. Say the stock’s current price,S0, is \$50, and a call option expiring in one year has an exercise price,X, of \$50 and is selling at a price,C, of \$9. With \$18,900 to invest, you are considering three alternatives.
a. Invest all \$18,900 in the stock, buying 378 shares.
b. Invest all \$18,900 in 2,100 options (21 contracts).
c. Buy 100 options (one contract) for \$900, and invest the remaining \$18,000 in a money market fund paying 6% in interest over 6 months (12% per year).
What is your rate of return for each alternative for the following four stock prices in 6 months?(Leave no cells blank – be certain to enter “0” wherever required. Negative amounts should be indicated by a minus sign. Round the “Percentage return of your portfolio (Bills + 100 options)” answers to 2 decimal places.)
The total value of your portfolio in six months for each of the following stock prices is:

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