Question: An Excel model based on the FinCorp example discussed in the text is shown below. The model allows you to use any variety of options,

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An Excel model based on the FinCorp example discussed in the text is shown below. The model allows you to use any variety of options, stock, and lending or borrowing with a set investment amount and demmentates the investment flexibility of options. Excel Questions 1. Plot the rate of return to the call-plus-bills strategy using a diagram like that in Figure 15.5 but now assuming the investor uses an in-the-money call option with a strike price of $80. Assume the calls sell for \$15. The higher cost for these calls compared to the at-the-money calls will result in less money being placed in T-bills because the investment budget is still$9.000. 2 Compare the plots of rate of return for the strategies using at-the-money calls (as in Figure 15.5) and your solution to Question 1. Which strategy is riskier

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