Question

9. You purchase one share of IBM July call option. The exercise price is 120 and the option premium is $5. You hold the option until the expiration date when IBM stock sells for $123 per share. You will realize a 1) $2 profit 2) $2 loss 3) $3 profit 4) $3 loss 5) None of the above on the investment. You purchased a put option with an exercise price of 120 and an option premium of $5). You hold the option until the expiration date when IBM stock sells for $127 per share. You will realize a 1) $2 profit 2) $2 loss 3) $5 loss 4) 0 profit 5) none of the above 10. on the investment. Sinog oblqm

Answer 1

Answer

9. The correct option in this case is 2 which suggest that it will be a loss of $2 if it is realized out of the investments.

10. The correct option is 1 which suggest that there will be a realization of $2 profit out of such investments.