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Business, 05.06.2020 04:57 red21120p718de

An investor has $19,000 to invest and believes that the IBM stock price is going to increase in the following 12 months from the current stock price of $200. Call options on IBM stock expiring in 12 months have a strike price of $207 and sell at a premium of $20 each. Assume that the stock price will be $268 per share after 12 months. a. What will be the investor's rate of return if they buy 450 call options?
b. What will be the investor's rate of return if they buy 45 shares?

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