So far, things have gone well with Dr. Bueller. Before you wrapup your meetings and he begins investing, you decide to spend alittle time sharing information with him about using derivatives tomanage risk and enhance returns in his stock portfolio. You decidethe best way to illustrate this is via a call option that he canuse on a stock that might have some upside potential. If the stockdoes not reach the potential, the option minimizes the risk. Thestock is AXQ Enterprises—a high-tech firm that did well during theInternet boom but declined when the boom turned into a bust. If thecompany’s new portal software is adopted by a large number ofconsumers over the next few months, you believe the stock can gomuch higher. The 6-month options are priced at US$1, the strikeprice is US$22, and the current price for AXQ stock is US$20. Puttogether a report of 4–6 pages (body of report) with a table orgraph included that illustrates what advice you would give Dr.Bueller on the options if the price of the stock was US$18, US$21,US$24, or US$28 at the end of 6 months. Assignment GuidelinesCreate a report of 4–6 pages (body of report) for Dr. Bueller thatincludes the following: Your table or graph that contains the stockoption data and the profit/loss depending on the hypothetical stockprices of US$18, US$21, US$24, or US$28 at the end of the 6-monthperiod. Your recommendations on whether or not to exercise theoption based on the 4 hypothetical stock prices. Explain thereasoning behind your recommendations. Answer the followingquestions: What happens if the stock price hits US$23? What happensif the stock price hits US$23.01? What purpose could adding atechnology company into a stock portfolio serve? Please be surethat your report adheres to the general format above. Yoursubmitted assignment must include the following: A report of 4–6pages (body of report) that includes a title page, your stockoption information table or graph, your stock optionrecommendations, and your answers to the questions listed in theAssignment Guidelines. Be sure to include a complete explanation ofthe rationale supporting your recommendations.