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Suppose that an investor initially purchases put options on 4000 Apple shares with an exercise price...

Suppose that an investor initially purchases put options on 4000 Apple shares with an exercise price of 100 dollars per share. The cost of the put option is 10 dollars per share. Then at a later date, she purchases call options on 3000 Apple shares with an exercise price of 120 dollars per share and the same expiration date as the put options above. The cost of the call option is 7 dollars per share.

a) Determine the total cost of the two option positions to the investor.

b) If, at option expiration, the price of Apple stock is 90 dollars, determine the total dollar payoff at option expiration to the investor from her option portfolio.

c) Given the information above, determine the dollar and percentage return to the investor from her entire option investment.

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