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You forecast that CVS Health (CVS) will increase above $80 per share by the end of 2020. You have $5,000 to invest now. Show a purchased call option today. Give the date and all the details of the purchase. Value your option at some point in time before your chosen maturity (you decide the date, use the BSOP model). Show your forecasted holding per return and forecasted annualized return if this call price premium comes true. You will have to make assumptions for the BSOP model list them.

1. You forecast that CVS will increase above $80 per share by the end of the year. Write options on this forecast. Give details. What will need to happen (be specific) for you to keep the premium you received the day you wrote the option. Show all numeric work. Show numerically what will happen if your forecast is incorrect.

2. You forecast that Royal Caribbean (RCL) will decrease below $25 per share by the end of 2020. You have $5,000 to invest. Show a purchased put option today. Value your option at some point in time before your chosen maturity. Value your option at some point in time before your chosen maturity (you decide the date, use the BSOP model). Show your forecasted holding per return and forecasted annualized return if this call price premium comes true. You will have to make assumptions for the BSOP model list them. Show your forecasted holding per return and forecasted annualized return.

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