You would like to speculate on a rise in the price of a certain stock. The current
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You would like to speculate on a rise in the price of a certain stock. The current stock price is $29, and a three-month call with a strike of $30 costs $2.90. You have $5,800 to invest. Identify two alternative strategies, one involving an investment in the stock and the other involving investment in the option. What are the potential gains and losses from each?
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One strategy would be to buy 200 shares Another would be t...View the full answer
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