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(c) Three friends Tom, Jerry, and Kate are members of an investment club....

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(c) Three friends Tom, Jerry, and Kate are members of an investment club. They each have a total of 10,000 to invest in three companies A, B, and C. On 1st Nov 2016, the following prices were available (E) Share Call Put Strike price, K. A 55 0.91 2.48 58 B 110 2.17 4.33 115 13 0.89 0.09 12.5 They made the following investments (not considering any dividends and commissions) Tom bought 80 A shares, 200 B calls and saved the rest of the money in the bank Jerry bought 50 B shares, 400 Cputs and saved the rest of the money in the bank Kate bought 50 A shares, 100 B calls and spent the rest on C shares. The options expired after six months and the bank interest rate was 5% compounded continuously (assume that fractional numbers of shares may be purchased). If, at the end of six months, A shares were worth 59, B shares 108 and C shares 12, find the value of each of the three friends portfolios and, hence the returns they made on their original investment of 10,000. [10]

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