The following table lists prices of Alphabet options in December2015 when Alphabet stock was selling for $750.
| Expiration Date | Exercise Price | Call Price | Put Price |
| January 2017 | $ | 700 | | $ | 105.11 | | $ | 63.54 | |
| | 750 | | | 81.80 | | | 76.50 | |
| | 800 | | | 61.10 | | | 106.00 | |
|
Suppose that by January 2017, the price of Alphabet could eitherrise from its December 2015 level to $750 Ă— 1.24 = $930.00 or fallto $750/1.24 = $604.84.
a. What would be your percentage return on aJanuary expiration call option with an exercise price of $750 ifthe stock price rose? (Negative amounts should be indicatedby a minus sign. Round your answers to 2 decimalplaces.)
b. What would be your percentage return if thestock price fell?
c. Which is riskier: the stock or theoption?
