Suppose you have $35$,000$ to invest. You$’$re considering Miller$-$Moore Equine Enterprises $($MMEE$),$ which is currently selling for $$4$5 per share. You also notice that a call option with a $$4$5 strike price and six months to maturity is available. The premium is $6$.$ MMEE pays no dividends. What is your annualized return from these two investments if$,$ in six months, MMEE is selling for $50 per share? What about $$36$ per share?

Note: A negative value should be indicated by a minus sign. Do not round intermediate calculations.

Answer rating: 100% (QA)

To calculate the annualized return from the two investments MMEE stock and call option based on diff... View the full answer