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Options (17 points) 11. (12 points) Suppose you purchase one Clearwire August $50 call option...
Suppose you purchase one Texas Instruments August 75 call contract quoted at $8.50. If, at expiration,...
Suppose you purchase one Texas Instruments August 75 call contract quoted at $8.50. If, at expiration, the price of a share of Texas Instruments stock is $79, your profit would be _________. (Note: One contract consists of 100 options.) A) 400 B) -400 C) 450 D) -450 Suppose you write one Texas Instruments August 80 call contract quoted at $6. If, at expiration, the price of a share of Texas Instruments stock is $79, your profit would be _________. A)...
A call option with a strike price of $50 on a stock selling at 60 costs...
A call option with a strike price of $50 on a stock selling at 60 costs $12.5. The call option's intrinsic value is 1) 10, 12.5 2) 12.5, 10 3) 50, 12.5 4) 10, 2.5 5) None of the above 8. and time value is 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...
Suppose Darlene is a speculator who buys five British pound call options with a strike price...
Suppose Darlene is a speculator who buys five British pound call options with a strike price of $1.50 and a March expiration date. The current spot price is $1.45 Darlene pays a premium of $0.01 per unit for the call option. Just before expiration, the spot price reaches $1.53 and Darlene exercises the option. Assume one option contract specifies 31,250 units. What is the profit or loss for Darlene?
You bought Stock A at a purchase price of: Put option strike price: $25 $15 Option...
You bought Stock A at a purchase price of: Put option strike price: $25 $15 Option expiration date: Price of put option: June 30, 2020 $5 Stock goes up to $50 Stock goes down to $5 Profit/Loss on stock if sell now Profit/Loss on call option if sell now
You bought Stock A at a purchase price of: Call option strike price: Option expiration date:...
You bought Stock A at a purchase price of: Call option strike price: Option expiration date: Price of call option: $25 $35 June 30, 2020 $5 Stock goes up to $50 Stock goes down to $5 A. Profit/Loss on stock if sell now B. Profit/Loss on call option if sell now All other things being equal, would you expect the price of the call option to be higher or lower than $5 for a stock that is identical to Stock...
Please explain the answer or steps. Thank you. 21. You write a call option with X S55 and buy a call with X $65. The options are on the same stock and have the same expiration date. One of the calls...
Please explain the answer or steps. Thank you.
21. You write a call option with X S55 and buy a call with X $65. The options are on the same stock and have the same expiration date. One of the calls sells for $3; the other sells for $9. What is the break-even point for this strategy? A) $55 B) $60 CS61 (Ans: Higher the strike, lower the price of the call. Because S55 strike pays over [55 to infinity]...
A 1-year European put option on a stock with strike price of $50 is quoted as...
A 1-year European put option on a stock with strike price of $50 is quoted as $7; a 1-year European call option on the same stock with strike price $30 is quoted as $5. Suppose you long one put and short one call (one option is on 100 share). a) Draw the payoff diagram for your put position and call position. (5 points) b) After 1-year, stock price turns out to be $45. What is your total payoff? What is...
1*.[2 points] You purchase a 6-month call option on euro for a premium of S0.05 per...
1*.[2 points] You purchase a 6-month call option on euro for a premium of S0.05 per unit, with an exercise (strike) price of $1.16; the option will not be exercised until the expiration date, if at all. You borrowed the money for the premium at 8% continuous compounding rate. If the euro's market price on the expiration date (t 6/12) is $1.06, how much is your net profit/loss per unit in dollars and in euros? Facts Graph: Calculations
A long straddle is an option strategy in which the investor buys a call option and...
A long straddle is an option strategy in which the investor buys a call option and a put option with the same strike price and the same expiration date. If the strike is $40/share and the premiums for the call and the put are $4/share and $3/share respectively. Draw the profit loss diagram for the long straddle strategy. Repeat problem 1 for a short straddle (i.e. write a call and write a put).
#9. Please help me solve for: "The profit (loss) experienced on option X" for options A-E....
#9. Please help me solve for: "The profit (loss) experienced on
option X" for options A-E. Thanks!
Options profits and losses for each of the 100-share options shown in the following table, use the underlying stock price at expiration and other information to determine the amount of profit or loss an investor would have had, ignoring brokerage fees Option Underlying stock price per share at expiration $51 Type of option Call Call Put Put Call Cost of option $190 $335...
A call option with a strike price of $50 on a stock selling at 60 costs $12.5. The call option's intrinsic value is 1) 10, 12.5 2) 12.5, 10 3) 50, 12.5 4) 10, 2.5 5) None of the above 8. and time value is 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...
You bought Stock A at a purchase price of: Put option strike price: $25 $15 Option expiration date: Price of put option: June 30, 2020 $5 Stock goes up to $50 Stock goes down to $5 Profit/Loss on stock if sell now Profit/Loss on call option if sell now
You bought Stock A at a purchase price of: Call option strike price: Option expiration date: Price of call option: $25 $35 June 30, 2020 $5 Stock goes up to $50 Stock goes down to $5 A. Profit/Loss on stock if sell now B. Profit/Loss on call option if sell now All other things being equal, would you expect the price of the call option to be higher or lower than $5 for a stock that is identical to Stock...
Please explain the answer or steps. Thank you.
21. You write a call option with X S55 and buy a call with X $65. The options are on the same stock and have the same expiration date. One of the calls sells for $3; the other sells for $9. What is the break-even point for this strategy? A) $55 B) $60 CS61 (Ans: Higher the strike, lower the price of the call. Because S55 strike pays over [55 to infinity]...
1*.[2 points] You purchase a 6-month call option on euro for a premium of S0.05 per unit, with an exercise (strike) price of $1.16; the option will not be exercised until the expiration date, if at all. You borrowed the money for the premium at 8% continuous compounding rate. If the euro's market price on the expiration date (t 6/12) is $1.06, how much is your net profit/loss per unit in dollars and in euros? Facts Graph: Calculations
#9. Please help me solve for: "The profit (loss) experienced on
option X" for options A-E. Thanks!
Options profits and losses for each of the 100-share options shown in the following table, use the underlying stock price at expiration and other information to determine the amount of profit or loss an investor would have had, ignoring brokerage fees Option Underlying stock price per share at expiration $51 Type of option Call Call Put Put Call Cost of option $190 $335...
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