How many stocks can you buy and how many option contracts a


If you have $4000 to invest and have the opportunity to either buy all stocks, or buy all options. The stock price is $20, calls for the stock have a strike of $21, and cost $2.

a. How many stocks can you buy, and how many option contracts (A contract is 100 options) can you buy?

b. If the stock increased to $25, what is your HPR ($ and %) for each scenario?

c. If the stock price decreased to $15, what is the HPR for each scenario?

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