You can buy a $100 share that will be worth either $120 or $70 in one year, a $100 bond that will be worth $107 in one year, or a call option for the stock for $10. Developing a replicating portfolio with the BOPM, the proportion of the portfolio in the stock should be
A) 40%.
B) 20%.
C) 60%.
D) 100%.

Question

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The Answer of You can buy a $100 share that will be worth either $120 or $70 in one year, a $100 bond that will be worth $107 in one year, or a call option for the stock for $10. Developing a replicating portfolio with the BOPM, the proportion of the portfolio in the stock should be
A) 40%.
B) 20%.
C) 60%.
D) 100%.

You Can Buy a $100 Share That Will Be Worth