Chapter 15.2, Problem 1EQ

Plot the rate of return to the call-plus-bills strategy using a diagram like that in Figure $\text{15}.\text{5}$but now assuming the investor uses an in-the-money can option with a strike price of $\$\text{8}0$. Assume the cans sell for $\$\text{15}$. The higher cost for these calls compared to the at-the-money calls will result in less money being placed in -bills because the investment budget is still $\$\text{9},000$.