Return on Stock Options. Maryanne paid $401 for a call option on a stock. The option...
Return on Stock Options. Maryanne paid $401
for a call option on a stock. The option gives her the right to buy the stock for $54.25
per share until March 1st. On February 15th, the stock price rises to $61.29
per share, and Maryanne exercises her option.
What is Maryanne's return from this transaction?
(Hint: Ignore transaction costs.)
Maryanne's return from this transaction is____%
(Round to the nearest percent.)
Homework Answers
We see that the Return from the
transaction=(100*MAX(61.29-54.25,0))/401-1=75.56%
Add Answer to:
Return on Stock Options. Maryanne paid $401
for a call option on a stock. The option...
Return on Stock Options. Teresa purchased a call option on a stock for $253. The option allows her to purchase the sto...
Return on Stock Options. Teresa purchased a call option on a stock for $253. The option allows her to purchase the stock for $43.19 per share if she exercises the option by December 31st. On December 15th, the stock rises to $73.12 per share and Teresa exercises the option. What is Teresa's return? (Hint: Ignore transaction costs.) Teresa's return is____%. (Round to the nearest percent.)
Return on Stock Options. Chris purchased a call option on a stock for $301. The option...
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Planning #3 (similar to): Return on Stoc Question Help Return on Stock Options. Teresa purchased a...
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The current price of a stock is $31.50 per share, and six-month European call options on...
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On January 2, 2020, Buffalo Company purchases a call option for $270 on Merchant common stock....
On January 2, 2020, Buffalo Company purchases a call option for $270 on Merchant common stock. The call option gives Buffalo the option to buy 1,010 shares of Merchant at a strike price of $53 per share. The market price of a Merchant share is $53 on January 2, 2020 (the intrinsic value is therefore $0). On March 31, 2020, the market price for Merchant stock is $56 per share, and the time value of the option is $180. a-...
On January 2, 2020, Windsor Company purchases a call option for $300 on Merchant common stock....
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Derivatives: Problem 1: On January 2, 2017, Jones Company purchases a call option for $300 on...
Derivatives:
Problem 1: On January 2, 2017, Jones Company purchases a call option for $300 on Merchant common stock. The call option gives Jones the option to buy 1,000 shares of Merchant at a strike price of $50 per share. The market price of a Merchant share is $50 on January 2, 2017. On March 31, 2017, the market price for Merchant stock is $53 per share, and the time value of the option is $200. REQUIRED: (a) Prepare the...
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On January 2, 2020, Carla Vista Corporation purchased a call option for $345 on Walter’s common...
On January 2, 2020, Carla Vista Corporation purchased a call
option for $345 on Walter’s common shares. The call option gives
Carla Vista the option to buy 1,110 shares of Walter at a strike
price of $26 per share any time during the next six months. The
market price of a Walter share was $26 on January 2, 2020 (the
intrinsic value was therefore $0). On March 31, 2020, the market
price for Walter stock was $39 per share, and...
Planning #3 (similar to): Return on Stoc Question Help Return on Stock Options. Teresa purchased a call option on a stock for $499. The option allows her to purchase the stock for $43.76 per share if she exercises the option by December 31st. On December 15th, the stock rises to $61.06 per share and Teresa exercises the option. What is Teresa's return? (Hint: Ignore transaction costs.) 20 Teresa's return is | |96. (Round to the nearest percent.)
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Derivatives:
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13. Reducing risks with put options Aa Aa Alison owns 100 shares of RTE Telecom Inc. stock that she bought for $40 per share. Alison bought a put option for all 100 shares of the stock with a strike price of $37 per share, option price of $2 per share, and a three-month term. Alison probably bought the option because she What did Alison pay to buy the option? $| sees a bright future for the company and its stock...
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