Options may also be used with other securities to devise various investment strategies. For example, an investor has the following alternative investments and their prices:

Common stock .............$ 100

Six-month call to buy 100 shares at $100 ...$ 400

Six-month $10,000 U.S. Treasury bill .....$9,600

The investor has $10,000 and thus could buy

(a) 100 shares of the stock or

(b) One call plus the Treasury bill. After six months how much profit or loss will the investor have earned on each alternative (excluding commissions) if the price of the stock is $110, 105, 100, 95, or 90? Which alternative is less risky?