ZuoTi.Pro
Question

A stock has a spot price of $98.91. Its January options are about to expire. One...

A stock has a spot price of $98.91. Its January options are about to expire. One of it's calls has a exercise (aka strike) price of $40. The call must be worth >= $____?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Price of call = > spot-strike = 98.91-40 = 58.91

phpREQLx6.png

0 0
Add a comment
Know the answer?
Add Answer to:
A stock has a spot price of $98.91. Its January options are about to expire. One...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A stock has a spot price of $27. Its March options are about to expire. One...

    A stock has a spot price of $27. Its March options are about to expire. One of its puts is worth $4 and one of its calls is worth $2. The exercise price of the put must be and the exercise price of the call must be Select one: a. One cannot tell from the information given. b. $29; $23 1 c. $25; $31 O d. $31; $25 e. $23; $29 You have bought one April 15th put option contract...

  • Custom Kraft's stock price is $60 a share. Call options on the stock are available, some...

    Custom Kraft's stock price is $60 a share. Call options on the stock are available, some with a strike price of $50 and some with a strike price of $70. Both options expire in three months. Which of the following is correct: The options with the $50 strike price have an exercise value of $20. If the stock price rose by $10, the exercise vlaue of the options with the $50 strike price would also increase by $10. The options...

  • A put option and a call option on a stock have the same expiration date and the same exercise (or strike price). Both options expire in 6 months. Assume that put-call parity holds and interest rate is...

    A put option and a call option on a stock have the same expiration date and the same exercise (or strike price). Both options expire in 6 months. Assume that put-call parity holds and interest rate is positive. If both call and put options have the same price, which of the following is true? A) Put option is in-the-money. B) Call option is in-the-money. C) Both call and put options are in-the-money. D) Both call and put options are out-of-the-money.

  • Assume the risk-free is zero and the market prices for Apple stock options that expire in...

    Assume the risk-free is zero and the market prices for Apple stock options that expire in 1 year are as follows: Strike Price $350.  $450 Call Premium $25. $75 Put Premium $15. $60 a) Specific the components and present cost of a long synthetic one-year forward agreement on Apple stock using only the options with strike price $350 in the table. The position should have a payoff at expiration that is identical to a 1-year forward agreement with a forward price...

  • Rutter Inc. granted 250,000 stock options to executives and employees on January 1, 2017. The options...

    Rutter Inc. granted 250,000 stock options to executives and employees on January 1, 2017. The options have a strike price is $10 per share and expire in 2019. The par value of the common stock is $1. Using an option pricing model, the company calculates a fair value of $20 per share. The expected service period, or benefit period, is 2 years.   Prepare the journal entries for 2017 and 2018.    In 2019, 40% of the options are exercised and the...

  • show all work and graph Southwest Airlines Options ( January 2020 expiration) Stock price $57.38 Calls...

    show all work and graph Southwest Airlines Options ( January 2020 expiration) Stock price $57.38 Calls Puts Strike $50 $55 $60 $70 Bid 0.20 1.30 Ask 0.45 Bid 7.70 3.70 1.10 0.04 Ask 7.90 3.80 1.25 0.10 1.45 4.30 18.60 4.10 17.20 1. (11 points) Back to the Southwest data from Exam 2. Suppose you write a put with a strike price of 55 and write a call with a strike price of 55 (use the bid quotes). Graph the...

  • #1 The following options on American Euro Call options are available. The current spot price of...

    #1 The following options on American Euro Call options are available. The current spot price of the Euro is $1.00/Euro. You care going to construct a short butterfly spread that entails: Sell 1 in the money call Buy 2 at the money Calls (lower strike than sold call above) Sell 1 out of the money call This strategy is outlined below in the table, the first column tells you which position to take in each option contract. Decision Type Premium...

  • Braddock Construction Co.'s stock is trading at $20 a share. Call options that expire in three...

    Braddock Construction Co.'s stock is trading at $20 a share. Call options that expire in three months with a strike price of $20 sell for $1.50. Which of the following will occur if the stock price decreases 10%, to $22 a share? a. The price of the call option will decrease by more than $2. b. The price of the call option will decrease by less than $2, and the percentage decrease in price will be less than 10%. c....

  • Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2018, options...

    Wall Drugs offered an incentive stock option plan to its employees. On January 1, 2018, options were granted for 60,000 $1 par common shares. The exercise price equals the $5 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2021, and expire December 31, 2022. Each option has a fair value of $1 based on an option pricing model. Which is the correct entry to record compensation expense for the year...

  • Rutter Inc. granted 300,000 stock options to executives and employees on January 1, 2017.  The options have...

    Rutter Inc. granted 300,000 stock options to executives and employees on January 1, 2017.  The options have a strike price is $10 per share and expire in 2019.  The par value of the common stock is $1. Using an option pricing model, the company calculates a fair value of $20 per share.  The expected service period, or benefit period, is 3 years.   Prepare the journal entries for 2017 and 2018.    In 2019, 30% of the options are exercised and the remaining options expire

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT