Question: QUESTION 7 Use the following information to answer the question. You're bullish on Alphabet Inc. (GOOG). The current price of Alphabet Inc is $1,000 (SO),

QUESTION 7 Use the following information to answer the question. You're bullish on Alphabet Inc. (GOOG). The current price of Alphabet Inc is $1,000 (SO), and a call option expiring in one year on this stock with an exercise price of $1,000 %) is selling for $100 (C) each. You have $10,000 to invest. You buy 10 Alphabet Inc. call options and invest the remaining balance in money market fund paying 5% annually. What is the rate of retum if the price of Alphabet decreases to $800 after one year? O -7.5% O -5.5% O -10% O -11% QUESTION 8 Use the following information to answer the question: You're bullish on Alphabet Inc. (GOOG). The current price of Alphabet Inc is $1,000 (SO), and a call option expiring in one year on this stock with an exercise price of $1,000 () is selling for $100 (C) each. You have $10,000 to invest. You invest all the $10,000 in call options on Alphabet Inc. stock. What is the rate of return if the price of Alphabet increases to $1,200 after one year? O 100% O 10% O 50% O 35%
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