Question One
StrategyPurchase Stock onlyPurchase stock and put optionsPurchase put and call options
Original Investment$45,000$45,000$45,000
Number of Shares (in original investment)1,000958 (rounding doesn't count)blank
Number of Putsblank958*11,250**
Number of Callsblankblank11,250
Value of investment at end of three months:

stock price is $60.00

$60,000$57,480$168,750
Value of investment at end of 3 months:

stock price is $30.00

$45,000$43,1100
Value of investment at end of 3 months:

stock price is $30.00

$30,000$43,110$168,750
Rank the three strategies (1, 2,3) in terms of risk, where 1 is the safest and 3 is the riskiest.213

* Let X be the number of shares purchased, and the number of put options $45X + $2X = $45,000, X=958
**Let Y be the number of call (or put) options purchased. $4Y = $45,000, Y = 11,250
One mark was given for each correct item provided in table. Three bonus marks were given for column one answers.
Question Two:

See the lecture slides on ethics for the graphs showing the various rights. One mark was given for each right, one mark for labelling it welfare or liberty rights, and one mark for a (very) brief discription of the right.