You are very bullish (optimistic) on stock EFG, much more so than the rest of the market In each question, choose the portfolio strategy that will give you the biggest dollar profit if your bullish forecast turns out to be correct Explain your answer a Choice A $10,000 invested in calls with X 50 C...

a Choice A Calls have higher elasticity than shares For equal dollar investments ...

You are very bullish (optimistic) on stock EFG, much more so than the rest of the market.

Question:

You are very bullish (optimistic) on stock EFG, much more so than the rest of the market. In each question, choose the strategy that will give you the biggest dollar profit if your bullish forecast turns out to be correct. Explain your answer.
a. Choice A: $10,000 invested in calls with X = 50.
Choice B: $10,000 invested in EFG stock.
b. Choice A: 10 call option contracts (for 100 shares each), with X = 50.
Choice B: 1,000 shares of EFG stock.

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...