Question: True or False? For this problem, assume the stock has a positive risk premium, which is the usual case. Because a call is a levered

True or False?

For this problem, assume the stock has a positive risk premium, which is the usual case. Because a call is a levered bet on the stock (i.e., we replicate the call by borrowing money and buying shares), the expected return of a call is greater than the expected return of the stock.

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