Here are some potential option strategies relating to MSFT:
• Strategy X: Buy the 6-month 65-strike call option
• Strategy Y: Sell the 6-month 63.25-strike call option
• Strategy Z: Buy the 6-month 63.25-strike put option
Thinking about MSFT, identify TWO strategies that will generate a profit, if Huiyin and Trinculo’s predictions are correct among X, Y and Z. Briefly justify your answers.
Thinking about MSFT, identify ONE strategy that WILL NOT WORK if Huiyin and Trinculo’s predictions are correct among X, Y and Z. Briefly justify your answer.
