Question: Problem 3-18 Annualized Returns (LO2, LO4, CFA1) Suppose you have $90,000 to invest. You're considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $90
Problem 3-18 Annualized Returns (LO2, LO4, CFA1) Suppose you have $90,000 to invest. You're considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $90 per share. You also notice that a call option with a strike price of $90 and six months to maturity is available. The premium is $4.5. MMEE pays no dividends. What is your annualized return from these two investments if, in six months, MMEE is selling for $97 per share? What about $86 per share? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Annualized Return Stock Option % $97 per share $86 per share % % %
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