How high does the stock price have to rise for the option, Business Economics

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How high does the stock price have to rise for the option

Buy shares or call option

The current price of a stock is $94, and three-month European call options with a strike price of $95 currently sell for $4.70. An investor who feels that the price of the stock will increase is trying to decide between buying 100 shares and buying 2,000 call options (20 contracts). Both strategies involve an investment of $9,400. How high does the stock price have to rise for the option strategy to be more profitable?

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Business Economics: How high does the stock price have to rise for the option

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Business Economics: How high does the stock price have to rise for the option

Reference No:- TGS028365

Have a Question? (oR Write a Review)

Recent Questions Asked Business Economics

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Request for Solution File

Ask an Expert for Answer!!

Business Economics: How high does the stock price have to rise for the option

Reference No:- TGS028365

Recent Questions Asked Business Economics

Q : How to use information in decision-making process

Q : Development model by kerwin and ponterotto

Q : What position should the fund manager take to hedge exposure

Q : Question based on prospect theory

Q : How high does the stock price have to rise for the option

Q : Three points for the ethics and social responsibility policy

Q : Decision to build the plant if marginal tax rate is given

Q : What should the arbitrageur do

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