Homework Answers
To offset her concern:-
Buy five put option contracts at a cost of $19.90.
Explanation:-
Since, she consider expects that the price will be double so she shouldn't sell the call option. But to hedge the risk she should buy put option so that if the price falls, the loss will be minimized.
Add Answer to:
RTF stock is currently priced at $2106 a share. The only options on this stock are...
(11 Suppose that Facebook stock is currently priced at $170 per share and you have bought...
(11 Suppose that Facebook stock is currently priced at $170 per share and you have bought a put option with the strike price at $150 per share. The option premium is $10. The intrinsic value of your option is A) -$10. B) $0. C) $10. D) $20. One share of General Electric stock is priced at $10 today. Both options below are on General Electric stock and expire in 3 months. Option A Option B Type Call option Put option...
Brookfield stock is selling for $50 a share, the $50 puts are priced at $0.49, and...
Brookfield stock is selling for $50 a share, the $50 puts are priced at $0.49, and the $50 calls are priced at $0.92. How much will you receive if you write ten $50 put option contracts? $980.00 $740.00 $490.00 $320.00 $2,120.00
Webster United stock is priced at $35.79 per share. The 6-month $35 call options are priced...
Webster United stock is priced at $35.79 per share. The 6-month $35 call options are priced at $1.40 and the risk-free rate is 3.2 percent, compounded continuously. What is the per share value of the 6-month put option?
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...
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...
Use the option quote information shown here to answer the questions that follow. The stock is...
Use the option quote information shown here to answer the
questions that follow. The stock is currently selling for $114, and
the size of each contract is 100 shares.
a. Suppose you buy 10 contracts of the
February 110 call option. How much will you pay, ignoring
commissions?
b-1. Suppose you buy 10 contracts of
the February 110 call option and also suppose that Macrosoft stock
is selling for $140 per share on the expiration date. How much is
your...
The current stock price of RWJ is $312.32. You have the following quotes on RWJ options:...
The current stock price of RWJ is $312.32. You have the following quotes on RWJ options: Expiration Exercise Price Calls Puts Dec 305 27.40 8.25 Jan 310 18.43 14.15 Feb 315 19.55 20.00 May 320 25.55 30.40 a. Which of the options are in the money? b. What is the exercise value of a February call option with a strike price of $315? c. Suppose you buy 10 contracts of the February 315 call option. How much will you pay,...
15. The following options are available on XYZ stock: | Туре Call Put $30 $30 |...
15. The following options are available on XYZ stock: | Туре Call Put $30 $30 | 1.00 1.25 Delta 0.703 -0.292 Gamma 0.036 0.032 The stock is currently priced at $32 and has a volatility (0) of 30% p.a. The continuously compounded risk-free rate is 5% p.a. The Black-Scholes option pricing model values the call at $5.60 and the put at $2.14. (a) Assume an options trader sells an XYZ call option, what position must she take in the stock...
1. (Put-call parity) A stock currently costs So per share. In each time period, the value...
1. (Put-call parity) A stock currently costs So per share. In each time period, the value of the stock will either increase or decrease by u and d respectively, and the risk-free interest rate is r. Let Sn be the price of the stock at t n, for O < n < V, and consider three derivatives which expire at t- N, a call option Vall-(SN-K)+, a put option Vpul-(K-Sy)+, ad a forward contract Fv -SN -K (a) The forward...
Suppose that an investor believes the price of Expedia (EXPE) stock, which currently is trading at...
Suppose that an investor believes the price of Expedia (EXPE) stock, which currently is trading at $50 per share, will increase substantially (to $75) in the near future. Call options on EXPE with a strike price of $50 are selling at a premium of $5. The investor has $5,000 to invest. Which of the following strategies would be most profitable if the investor's expectations turn out to be correct? A)Buy 100 shares of EXPE stock. B)Buy 50 shares of EXPE...
1. (Put-call parity) A stock currently costs So per share. In each time period, the value...
1. (Put-call parity) A stock currently costs So per share. In each time period, the value of the stock will either increase or decrease by u and d respectively, and the risk-free interest rate is r. Let Sn be the price of the stock at t-n, for O < n < N, and consider three derivatives which expire at t - V, a cal option Voll-(SN-K)+, a put option VNut-(X-Sy)+, and a forward option VN(SN contract FN SN N) ,...
(11 Suppose that Facebook stock is currently priced at $170 per share and you have bought a put option with the strike price at $150 per share. The option premium is $10. The intrinsic value of your option is A) -$10. B) $0. C) $10. D) $20. One share of General Electric stock is priced at $10 today. Both options below are on General Electric stock and expire in 3 months. Option A Option B Type Call option Put option...
Webster United stock is priced at $35.79 per share. The 6-month $35 call options are priced at $1.40 and the risk-free rate is 3.2 percent, compounded continuously. What is the per share value of the 6-month put option?
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...
Use the option quote information shown here to answer the
questions that follow. The stock is currently selling for $114, and
the size of each contract is 100 shares.
a. Suppose you buy 10 contracts of the
February 110 call option. How much will you pay, ignoring
commissions?
b-1. Suppose you buy 10 contracts of
the February 110 call option and also suppose that Macrosoft stock
is selling for $140 per share on the expiration date. How much is
your...
15. The following options are available on XYZ stock: | Туре Call Put $30 $30 | 1.00 1.25 Delta 0.703 -0.292 Gamma 0.036 0.032 The stock is currently priced at $32 and has a volatility (0) of 30% p.a. The continuously compounded risk-free rate is 5% p.a. The Black-Scholes option pricing model values the call at $5.60 and the put at $2.14. (a) Assume an options trader sells an XYZ call option, what position must she take in the stock...
1. (Put-call parity) A stock currently costs So per share. In each time period, the value of the stock will either increase or decrease by u and d respectively, and the risk-free interest rate is r. Let Sn be the price of the stock at t n, for O < n < V, and consider three derivatives which expire at t- N, a call option Vall-(SN-K)+, a put option Vpul-(K-Sy)+, ad a forward contract Fv -SN -K (a) The forward...
1. (Put-call parity) A stock currently costs So per share. In each time period, the value of the stock will either increase or decrease by u and d respectively, and the risk-free interest rate is r. Let Sn be the price of the stock at t-n, for O < n < N, and consider three derivatives which expire at t - V, a cal option Voll-(SN-K)+, a put option VNut-(X-Sy)+, and a forward option VN(SN contract FN SN N) ,...
Most questions answered within 3 hours.
-
Discuss the benefits and detriments of hard water, and your
opinion on using water softeners.
asked 30 minutes ago -
For a Friedel-Crafts alkylation reaction between
1,4-dimethoxybenzene with 3-methyl-2-butanol and sulfuric acid what
product was formed...
asked 9 minutes ago -
This programming assignment needs to be written so that it can
do infix expression to postfix...
asked 15 minutes ago -
Below are the reduction half reactions for chemolithoautotrophic
denitrification, where hydrogen is a source of electrons...
asked 15 minutes ago -
On January 2, 2020, the Retail Auto Parts Company received a
notice from its primary supplier...
asked 24 minutes ago -
An electron of kinetic energy 13.0 keV moves in a circular orbit
perpendicular to a magnetic...
asked 28 minutes ago -
1. Explain how a fractionating column increases the separation
of two liquids.
2. What is an...
asked 29 minutes ago -
One of two hydrogen atoms has electrons at n = 1 Bohr orbit
while the other...
asked 32 minutes ago -
On January 1, Year 1, Sheffield Co. issued bonds with a face
value of $200,000, a...
asked 42 minutes ago -
Write a short application that computes the perimeter of a
rectangle. It should allow the user...
asked 42 minutes ago -
An inventory of Product A has to be maintained at NiceCare using
the EOQ model, based...
asked 50 minutes ago -
Define the 2
24.Moral Imperialism
25.Selective Service Act
26.Tulsa Riot
27.Red Scare
28.League of Nations
29....
asked 59 minutes ago