Question

The current price of a stock is $94 & European call options with a strike of...

The current price of a stock is $94 & European call options with a strike of $95 currently sell for $4.70. An investor is trying to decide between buying 100 shares of stock and buying 2,000 call options (= 20 option contracts).

A. At what stock price would the investor be indifferent between these 2 trades?

B. At what stock prices would the investor be better off with the option contract purchase?

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Answer #1

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