Suppose you have $60,000 to invest. You're considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $30 per share. You also notice that a call option with a $30 strike price and six months to maturity is available.
The premium is $3. MMEE pays no dividends. What is your annualized return from these two investments if, in six months, MMEE is selling for $35 per share?
What about $26 per share? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Annualized Return Stock Option
$35 per share ----- % ----- %
$26 per share ------ % ---- %