The potential gain for a holder of a naked call option on a stock is _________....
The potential gain for a holder of a naked call option on a stock is _________.
Multiple Choice
-
equal to the strike price plus the premium
Incorrect -
larger with a higher strike price
-
unlimited
-
larger with a higher stock price
A put option on Brocklehurst Corp. has an exercise price of $30. The current stock price of Brocklehurst Corp. is $32. The put option is _________.
Multiple Choice
-
at the money
-
in the money
Incorrect -
out of the money
-
Not enough information to determine.
Homework Answers
1]
The holder of a call options has potentially unlimited profit because profit for holder of call option = stock price at expiry - strike price. Thus, the holder has potentially unlimited profit because there is no limit to how much a stock price can rise.
The answer is "unlimited"
2]
A put option is out of the money if the stock price is higher than the option strike price.
The answer is "out of the money"
Add Answer to:
The potential gain for a holder of a naked call option on a
stock is _________....
The potential gain for a holder of a naked call option on a stock is _________....
The potential gain for a holder of a naked call option on a stock is _________. Multiple Choice equal to the strike price plus the premium larger with a higher strike price unlimited larger with a higher stock price
The current market price of a share of Disney stock is $30. If a call option...
The current market price of a share of Disney stock is $30. If a call option on this stock has a strike price of $35, the call is out of the money. is in the money. can be exercised profitably. is out of the money and can be exercised profitably. is in the money and can be exercised profitably. The maximum loss for a writer of a put option on a stock is unlimited. equal to the exercise price. equal...
The maximum possible gain of a long position in call option is __________, and the maximum...
The maximum possible gain of a long position in call option is __________, and the maximum possible gain of a short position in put option is __________. Multiple Choice exercise price - stock price, premium stock price - exercise price, unlimited unlimited, exercise price - stock price unlimited, premium
The maximum possible gain of a long position in call option is __________, and the maximum...
The maximum possible gain of a long position in call option is __________, and the maximum possible gain of a short position in put option is __________. Multiple Choice A) stock price - exercise price, unlimited B) exercise price - stock price, premium C) unlimited, exercise price - stock price D) unlimited, premium
questions 25-28 please 25. You buy a call option on Boeing Corp with an exercise price...
questions 25-28 please
25. You buy a call option on Boeing Corp with an exercise price of $40 and an expiration date in September, and you write a call option on Boeing Corp with an exercise price of $40 and an expiration date in October. This strategy is called a A. Time spread B. Long straddle C. Short straddle D. Money spread E. None of the above 26. The maximum loss a buyer of a stock's call option can suffer...
25. You buy a call option on Boeing Corp with an exercise price of $40 and...
25. You buy a call option on Boeing Corp with an exercise price of $40 and an expiration date in September, and you write a call option on Boeing Corp with an exercise price of $40 and an expiration date in October. This strategy is called a A. Time spread B. Long straddle C. Short straddle D. Money spread E. None of the above 26. The maximum loss a buyer of a stock's call option can suffer is A. The...
12. (2 points) A call option on Brocklehurst Corp. has an exercise price of $30. The...
12. (2 points) A call option on Brocklehurst Corp. has an exercise price of $30. The current stock price of Brocklehurst Corp. is $32. The call option is a. at the money b. in the money c. out of the money d. knocked in 13. (3 points) You purchase one MBI March 120 put contract (equaling 100 shares) for a put premium of 510. The maximum profit that you could gain from this strategy is 2. S120 b. $1,000 c....
• Short currency strangle . Call option premium - $0.03/€, Put option premium - $0.028€ Call...
• Short currency strangle . Call option premium - $0.03/€, Put option premium - $0.028€ Call option strike price = $1.15/€, Put option strike price - $1.05/€ Option contract size = €62,500 Draw graphs of call option, put option, and straddle • Mark BE point and Strike prices • Mark each premium $1.05/€ $1.10/€ $1.15/€ | $1.20/€ $1.25/€ $1.30/€ Spot exchange rate Does holder exercise? Sell call option Holder's net profit per unit Seller's net profit per unit Does holder...
European put option with strike Find the expected gain (or loss) for a holder of a...
European put option with strike Find the expected gain (or loss) for a holder of a price $65 to be exercised in 10 months if the stock price on the exercise date may turn out to be $58, $61, or $72 with probability 1, 1, and 3, respectively, given that the loan at 7% compounded continuously option is bought for $5.9, financed by
• Long cury strangle Call option premium - 50.03., Put option premium - $0.02 € Call...
• Long cury strangle Call option premium - 50.03., Put option premium - $0.02 € Call option strike price 1.25/6, Put option strike price $1.15 € Option contract size - €62,500 Draw graphs of call option, put option, and straddle Mark BE point and Strike prices Mark each premium 1 S105 S 15E $1.20 € $1.25 € $1.30/E Long call option Spot exchange rate Exercise (NY) Holder's net profit per unit Exercise (NY Holder's net profit per unit Net profit...
questions 25-28 please
25. You buy a call option on Boeing Corp with an exercise price of $40 and an expiration date in September, and you write a call option on Boeing Corp with an exercise price of $40 and an expiration date in October. This strategy is called a A. Time spread B. Long straddle C. Short straddle D. Money spread E. None of the above 26. The maximum loss a buyer of a stock's call option can suffer...
25. You buy a call option on Boeing Corp with an exercise price of $40 and an expiration date in September, and you write a call option on Boeing Corp with an exercise price of $40 and an expiration date in October. This strategy is called a A. Time spread B. Long straddle C. Short straddle D. Money spread E. None of the above 26. The maximum loss a buyer of a stock's call option can suffer is A. The...
12. (2 points) A call option on Brocklehurst Corp. has an exercise price of $30. The current stock price of Brocklehurst Corp. is $32. The call option is a. at the money b. in the money c. out of the money d. knocked in 13. (3 points) You purchase one MBI March 120 put contract (equaling 100 shares) for a put premium of 510. The maximum profit that you could gain from this strategy is 2. S120 b. $1,000 c....
• Short currency strangle . Call option premium - $0.03/€, Put option premium - $0.028€ Call option strike price = $1.15/€, Put option strike price - $1.05/€ Option contract size = €62,500 Draw graphs of call option, put option, and straddle • Mark BE point and Strike prices • Mark each premium $1.05/€ $1.10/€ $1.15/€ | $1.20/€ $1.25/€ $1.30/€ Spot exchange rate Does holder exercise? Sell call option Holder's net profit per unit Seller's net profit per unit Does holder...
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