ANSWER - CURRENT PRICE = $150
call payoff = Max[0, spot price - strike price]
put payoff = Max[0, strike price - spot price]
A. CALL OPTION X = $145
call payoff = Max[0, spot price - strike price]
= Max[0, 150- 145]
= 5
loss = cost of premium - payoff
=5.18 - 5
= 0.18 per share loss
B. PUT OPTION AT X = $145
put payoff = Max[0, strike price - spot price]
= max[0, 145 - 150]
= 0
loss = cost of premium - premium
= 0.48 - 0
loss = 0.48 per share
C. CALL OPTION AT X = $150
call payoff = Max[0, spot price - strike price]
= Max[0, 150- 150]
= 0
loss = cost of premium - payoff
= 1.85 - 0
= 1.85 per share loss
D. PUT OPTION AT X = $150
put payoff = Max[0, strike price - spot price]
= max[0, 150 - 150]
= 0
loss = cost of premium - premium
=1.81 - 0
loss = 1.81 per share
E. CALL OPTION X = $155
call payoff = Max[0, spot price - strike price]
= Max[0, 150- 155]
= 0
loss = cost of premium - payoff
=0.79 - 0
= 0.79 per share loss
F. PUT OPTION AT X = $155
put payoff = Max[0, strike price - spot price]
= max[0, 155 - 150]
= 5
loss = cost of premium - premium
=5.95 - 5
loss = 0.95 per share
solve Use the data in the following table to calculate the payoff and the profits for...
6. Referring to Figure 20.1 in your textbook “Investments” (Bodie, Kane, Marcus,11th Edition). This table lists prices of various IBM options. Calculate the option value (the option payoff) at expiration AND the profits/(losses) for investments in each of the following July 2016 expiration options, assuming that the stock price on the expiration date on July 15, 2016, is $150. You can use the data in Figure 20.1 if it helps you. In the chart below, “X” is the Strike (exercise...
Problem 2-18 Refer to Table 2.7 and look at the IBM options. Suppose you buy a July 2016 expiration call option with exercise price $150. a-1. Suppose the stock price in July is $153.70. Will you exercise your call? • Yes No a-2. What is the profit (loss) on your position? (Enter your answer as a positive value rounded to 2 decimal places.) Table 2.7 Explration Strike Call Put 6.60 1.57 3.30 Prices of stock options on IBM, May 10,...
Use data from the following table to answer questions 1, 2, and 3. Option Quote Call Put Expiration Strike Last Volume Open Interest Last Volume Open Interest Jan 190 4.40 815 5697 1.75 507 2496 Feb 190 6.75 402 2808 3.00 3553 10377 Apr 190 8.85 107 1866 5.20 527 2177 Jul 190 10.95 15 645 8.54 6 1142 Jan 195 0.01 2451 11718 0.70 4090 8862 Feb 195 3.65 1337 11902 5.00 860 3156 Apr 195 5.90 1785 2928...
Refer to Eigure 15.1 which lists the prices of various Microsoft options Use the data in the figure to calculate the payoff and the proft/loss for investments in each of the following July 2017 expiration options on a single share, assuming that the stock price on the expiration date is S76 (Leave no cells blenk . be certain to enter-0-wherever required. Lon amount iheul be instated。,a minus sign. Round "Profit/Loss" to 2 decimal places Payoff Profit Loss Call optonX Put...
Problem 13 Refer to the stock options on IBM in the following table Expiration Jul Strick Last 50 5.00 Call Volume Open Interest 32874 46311 | Last 14.00 Put Volume Open Interest 15148 9711 nat will be the profit/loss and the return to an investor who buys the call in the following scenarios for stock prices in six months? Fill in the following table. Answer: Stock Price 45 50 Initial Cost ($) Profi/Loss ($) Return 50 To 0% SO 1sts)=0%"...
Refer to Table 10-6 Price quotes are stated in 1/64ths a. How many ExxonMobil October 2016 $90.00 put options were outstanding at the open of trading on August 3, 2016? b. What was the closing price of a 10-year Treasury note December 13300 futures call option on August 3, 2016? c. What was the closing and dollar price of a December 2160 call option on the S&P 500 Stock Index futures contract on August 3. 2016? d. What was the...
TABLE 23.2 Pons Price Quotations Indenying Future May 2017 . 3814 3772 3760 Type: American Options Expiration: May 2017 Strike Range: At The Money Low Updated Limit Volume Hig Battle Change Las Bree Last Low Volume Updated Low 237 231 272 227 -40 267 3600 59 44 55 50 53 No 591 Lime 223 195 40 67 73 TO NO 676 Lim 00 05 102 203 165 197 370 86 94 07 No 917 LIM 889 201 357 17 14...
Project 3. Options: Valuation In this project you wll apply material on option valuation of option positions. You may work individually or in a group of two. file ort with other 10 ro groups. Due date: Wednesday, May 22 a 1:59 p.m. No projects will be accepted after the due date. Please reach out if you need help with the project. Option Valuation BlackBoard. Use the S&P 500 index options data for April 3, 2014 posted on . Calculate the...
Suppose you purchase a March 2017 oats futures contract on this day at the last price of the day. Use Table 23.1 What will your profit or loss be if oats prices turn out to be $2.4713 per bushel at expiration? (Do not round intermediate calculations. Enter your answer as a positive value and round your answer to 2 decimal places, e.g., 32.16.) Loss TABLE 23.1 Sample Wall Street Journal Futures Price Quotations Chg Open interest -0.0125 -0.0130 6 72...
QUESTION 10
Consider the monthly data, including the estimates for March
2020, and the information in the articles. Which of the following
is the best analysis of and prediction for the money market in the
U.S. economy for the next few months?
a.
Shortages are causing panic buying by households, which has
increased money demand. Lenders are increasing their lending to
keep up with the needs of households and businesses. Money demand
is increasing more than money supply.
b.
Shortages...