Please answer correctly Do not give the wrong answer by answering each column appropriately Suppose you think AppX stock is going to appreciate substantially in value in the next year. Say the stock's current price, So, is $100,and the call option expiring in one year has an exercise price, X, of $100 and is selling at a price, C, of $10. With $10,000 to invest, youare considering three alternatives:a. Invest all $10,000 in the stock, buying 100 shares.b. Invest all $10,000 in 1,000 options (10 contracts).c. Buy 100 options (one contract) for $1,000 and invest the remaining $9,000 in a money market fund paying 4% interest annually. b. Calculate the rate of return on investment for stock price one year from now?Note: Leave no cells blank - be certain to enter "O" wherever required. Negative values should be indicated by a minus sign.Round your answers to 1 decimal place.a. All stocks (100 shares)b. All options (1,000 options)c. Bills +100 options$80%%%Price of Stock 1 Year from Now$100%%%$110$120%%%%%%

Step 1: a: Invest all $10,000 in the stock (100 shares) 1. Price of stock = $80: Value of stocks:…

Answered: Suppose you think AppX stock is going…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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