1. Stock in Cheezy-Poofs Manufacturing is currently priced at $50 per share. A call option with a $50 strike and 90 days to maturity is quoted at $1.50. Compare the percentage gains and losses from a $80,000 investment in the stock versus the option in 90 days for stock prices of $45, $50, and $55.
2. For tax purposes, interest on corporate debt is
A. deductible for the investor, but not for the borrower.
B. deductible for the borrower, but not for the investor.
C. fully taxable for both the borrower and the investor.
D. fully deductible for both the borrower and the investor.