Suppose you think AppX stock is going to appreciate substantially in value in the next year. Say the stock’s current price,

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?

The total value of your portfolio in six months for each of the following stock prices is:

*S*_{0}, 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: