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The following table lists prices of Alphabet options in December 2015 when Alphabet stock was selling...

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Finance

The following table lists prices of Alphabet options in December2015 when Alphabet stock was selling for $750.

Expiration DateExercise PriceCall PricePut Price
January 2017$700$105.11$63.54
75081.8076.50
80061.10106.00

Suppose that by January 2017, the price of Alphabet could eitherrise from its December 2015 level to $750 × 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.)

Percentage return%

b. What would be your percentage return if thestock price fell?

Percentage return%

c. Which is riskier: the stock or theoption?

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