When we create a chart for our payoff diagram, what do we put on the X...
When we create a chart for our payoff diagram, what do we put on the X axis?
| A. |
The premium |
|
| B. |
The strike price |
|
| C. |
The stock price |
|
| D. |
None of the above |
When we create a chart for our payoff diagram, what do we put on the Y axis?
| A. |
The premium |
|
| B. |
The strike price |
|
| C. |
The stock price |
|
| D. |
None of the above |
If a payoff diagram shows a loss of $46 a a share, how much do we lose in total?
| A. |
$46.00 |
|
| B. |
$460.00 |
|
| C. |
$4,600 |
|
| D. |
$46,000.00 |
Homework Answers
1) The payoff diagram represents how the payoff varies as stock price changes. So that X-asis will be stock price
2) As mentioned above, the Y-axis will be payoff
3) Usually, stocks / derviatives are sold in lots and one equity derivative = 100 underlying shares
so, if the loss is $46 a share, then total loss will be $4600
Add Answer to:
When we create a chart for our payoff diagram, what do we put on
the X...
When we create a chart for our payoff diagram, what do we put on the X...
When we create a chart for our payoff diagram, what do we put on the X axis? A. The premium B. The strike price C. The stock price D. None of the above
When we create a chart for our payoff diagram, what do we put on the Y...
When we create a chart for our payoff diagram, what do we put on the Y axis? A. The premium B. The strike price C. The stock price D. None of the above
If a payoff diagram shows a loss of $46 a a share, how much do we lose in total? A. $46.00 B. $460.00 C. $4,600 D. $46,0...
If a payoff diagram shows a loss of $46 a a share, how much do we lose in total? A. $46.00 B. $460.00 C. $4,600 D. $46,000.00
What is the maximum payoff that a long put option can have? How about a long...
What is the maximum payoff that a long put option can have? How about a long call option? What is the maximum payoff that a long put option can have? O A. Twice the difference of the price of the put at the time of purchase and the strike price O B. The stock price at the time of purchase O C. The strike price O D. There is no maximum payoff for a long put option. What is the...
The payoff diagram for deposit insurance is the same as the payoff diagram for which of the following. a. long call b. short put c. short call d. none is correct
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Suppose we want to chart the profit or loss of a covered call. The stock is purchased at $75 a share. The call premium is $3.45 and has a strike price of $80. At a stock price of $50 a share, what are our total gains or losses per share with this strategy? A. Loss of $25 B. Loss of $21.55 C. Gain of $3.45 D. Gain of $9.45
Suppose we want to chart the profit or loss of a covered call. The stock is...
Suppose we want to chart the profit or loss of a covered call. The stock is purchased at $75 a share. The call premium is $3.45 and has a strike price of $80. At a stock price of $80 a share, what are our total gains or losses per share with this strategy? A. Gain of $5.00 B. Gain of $8.45 C. Gain of $1.55 D. Loss of $1.55
Exercise 1. An investor has a short position in a European put on a share for $4. The stock price is $40 and the strike price is $41 Under what cicum be cuercise (b) Under what circumstance does the...
Exercise 1. An investor has a short position in a European put on a share for $4. The stock price is $40 and the strike price is $41 Under what cicum be cuercise (b) Under what circumstance does the investor make a profit? (c) Draw a payoff diagram plotting the investor's payoff as a function of Sr. (d) Draw a profit diagram plotting the investor's profit as a function of ST. (e) Suppose now the investor enters also into a...
1. You are the buyer of a put option which has a put premium of $2.30. The strike price is $83 and the underlying stock...
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What is the maximum payoff that a long put option can have? How about a long call option? What is the maximum payoff that a long put option can have? O A. Twice the difference of the price of the put at the time of purchase and the strike price O B. The stock price at the time of purchase O C. The strike price O D. There is no maximum payoff for a long put option. What is the...
Exercise 1. An investor has a short position in a European put on a share for $4. The stock price is $40 and the strike price is $41 Under what cicum be cuercise (b) Under what circumstance does the investor make a profit? (c) Draw a payoff diagram plotting the investor's payoff as a function of Sr. (d) Draw a profit diagram plotting the investor's profit as a function of ST. (e) Suppose now the investor enters also into a...
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