A call option gives its owner the _____ a security at the strike price within the option period.
1. |
right, but not the obligation, to sell |
|
2. |
obligation to buy |
|
3. |
right to borrow |
|
4. |
right, but not the obligation, to buy |
|
5. |
obligation to sell |
Ans 4. right, but not the obligation, to buy
A call option gives its owner the right, but not the obligation, to buy a security at the strike price within the option period.
A call option gives its owner the _____ a security at the strike price within the...
An option that gives its owner the right to sell a share of stock at a fixed strike price is known as a(n): put option synthetic option European option call option real option
An American call option gives the writer the _________ to _________ the underlying asset at the exercise price on or before the expiration date. Multiple Choice obligation, sell obligation, buy right, buy right, sell
Assume that the stock price is $56, call option price is $9, the put option price is $5, risk-free rate is 5%, the maturity of both options is 1 year , and the strike price of both options is 58. An investor can __the put option, ___the call option, ___the stock, and ______ to explore the arbitrage opportunity. A. sell, buy, short-sell, borrow B. buy, sell, buy, borrow C. sell, buy, short-sell, lend D. buy, sell, buy, lend
suppose a call option with a strike price of $60 has a premium of $15, while another call on the same underlying stock has a strike price of $65 and a premium of $14. Both options expire at the same time. in this situation, an arbitrager would... a. buy the 65-strike call and sell the 60-strike short b. sell both call options. c. do nothing because arbitrage isn’t possible d. buy the 60 strike call and sell the 65-strike call...
Suppose that you sell for $14 a call option with a strike price of $47, sell for $7 a call option with a strike price of $57, and buy for $9 each two call options with a strike price of $52. What is your minimum possible profit?
g) European call with a strike price of $40 costs $7. European put with the same strike price and expiration date costs $6. Assume that you buy two calls and one put (strap strategy). Sketch the graph and write down functions of payoff and profit h) Consider a stock with a price of $50 and there is European put option on that stock with the strike of $55 and premium of $4. Assume that you buy 1/3 of a stock...
If I buy a call option with a price of $1, with a strike price of $110, and the stock price ends up being $90, what is my holding period return? How would this return be different if a dividend of 2.5% was received? Subject: Portfolio management
Consider a call option with strike price of 2.5. Underlying stock is expected to follow the distribution: Price Prob 1 0.05 2 0.20 3 0.25 4 0.25 5 0.20 6 0.05 1. When stock price is above the strike price of 2.5, what is the average value of the stock? (hint: first find conditional probabilities and then do a weighted average) 2. What is the average payment from the call option when the call option is in the money (ie...
27. The writer (seller) of a put option a. agrees to sell shares at a set price if the option holder desires b. agrees to buy shares at a set price if the option holder desires c. has the right to buy shares at a set price d. has the right to spl shares at a set price 17. A call option is said to be "in-the-money" if a. the stock price (i.e. the underlying asset) is greater than the...
Asian call option with strike equal to 100. Find the price of an Asian 2 month option on a stock that currently trades at 100$ and its price will go up in each month by 40% with probability of 3/5, and will go down by 30% with probability of 2/5. The payoff of the Asian option is determined by the average underlying price over the period after buying option and the time of exercise. 1-month risk-free rate is 2%