You purchase a 1-year European call option on ABC stock with strike price 100. The option...
You purchase a 1-year European call option on ABC stock with strike price 100. The option premium is $10. The effective annual interest rate is 10%, so that 100 dollars lent for 1 year will return 110 dollars. What is the PROFIT if ABC stock is trading at 111 on the expiration day?
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You purchase a 1-year European call option on ABC stock with
strike price 100. The option...
You purchase a European put option on XYZ stock with strike price 50. What is the...
You purchase a European put option on XYZ stock with strike price 50. What is the payoff to the option if XYZ stock is trading at 48 on the expiration day? You purchase a 1-year European call option on ABC stock with strike price 100. The option premium is $10. The effective annual interest rate is 10%, so that 100 dollars lent for 1 year will return 110 dollars. What is the PROFIT if ABC stock is trading at 111...
1. Consider the following information about a European call option on stock ABC: . The strike...
1. Consider the following information about a European call option on stock ABC: . The strike price is S100 The current stock price is $110 The time to expiration is one year The annual continuously-compounded risk-free rate is 5% ·The continuous dividend yield is 3.5% Volatility is 30% . The length of period is 4 months. Find the risk-neutral probability p*. Hint: 45.68%
A one-year European call option on Stanley Industries stock with a strike price of $55 is...
A one-year European call option on Stanley Industries stock with a strike price of $55 is currently trading for $75 per share. The stock pays no dividends. A one-year European put option on the stock with a strike price of $55 is currently trading for $100. If the risk-free interest rate is 10 percent per year, then what is the current price on one share of Stanley stock assuming no arbitrage?
Question 9 Curley buys a one-year 50-strike European call option from Moe for a premium of...
Question 9 Curley buys a one-year 50-strike European call option from Moe for a premium of $7.43. The risk-free interest rate is 0.5% effective. For what spot price at expiration is Moe's profit 0?
d) ABC stock is trading at $100 per share. The stock price will either go up...
d) ABC stock is trading at $100 per share. The stock price will either go up or go down by 25% in each of the next two years. The annual interest rate compounded continuously is 5%. (i) (ii) Determine the price of a two-year European call option with the strike price X = $110. Determine the price of a two-year European put option with the strike price X = $110. Determine the price of a two-year American put option with...
g) European call with a strike price of $40 costs $7. European put with the same...
g) European call with a strike price of $40 costs $7. European put with the same strike price and expiration date costs $6. Assume that you buy two calls and one put (strap strategy). Sketch the graph and write down functions of payoff and profit h) Consider a stock with a price of $50 and there is European put option on that stock with the strike of $55 and premium of $4. Assume that you buy 1/3 of a stock...
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...
You purchase 14 call option contracts with a strike price of $80 and a premium of...
You purchase 14 call option contracts with a strike price of $80 and a premium of $1.80. Assume the stock price at expiration is $92.00. a. What is your dollar profit? b. What is your dollar profit if the stock price is $77.95? (A negative value should be indicated by a minus sign. Do not round intermediate calculations.) f the stock price is $77.95, the call is , so the dollar profit is
The current stock price is 100. The call option premium with a strike price 100 is...
The current stock price is 100. The call option premium with a strike price 100 is 8. The effective risk-free interest rate is 2%. The stock pays no dividend. What is the price of a put option with strike price 100? (Both options mature in 3 months.)
Question 7: Consider a European call option and a European put option on a non dividend-paying...
Question 7: Consider a European call option and a European put option on a non dividend-paying stock. The price of the stock is $100 and the strike price of both the call and the put is $103, set to expire in 1 year. Given that the price of the European call option is $10.57 and the risk-free rate is 5%, what is the price of the European put option via put-call parity? Question 8: Suppose a trader buys a call...
You purchase a European put option on XYZ stock with strike price 50. What is the payoff to the option if XYZ stock is trading at 48 on the expiration day? You purchase a 1-year European call option on ABC stock with strike price 100. The option premium is $10. The effective annual interest rate is 10%, so that 100 dollars lent for 1 year will return 110 dollars. What is the PROFIT if ABC stock is trading at 111...
1. Consider the following information about a European call option on stock ABC: . The strike price is S100 The current stock price is $110 The time to expiration is one year The annual continuously-compounded risk-free rate is 5% ·The continuous dividend yield is 3.5% Volatility is 30% . The length of period is 4 months. Find the risk-neutral probability p*. Hint: 45.68%
Question 9 Curley buys a one-year 50-strike European call option from Moe for a premium of $7.43. The risk-free interest rate is 0.5% effective. For what spot price at expiration is Moe's profit 0?
d) ABC stock is trading at $100 per share. The stock price will either go up or go down by 25% in each of the next two years. The annual interest rate compounded continuously is 5%. (i) (ii) Determine the price of a two-year European call option with the strike price X = $110. Determine the price of a two-year European put option with the strike price X = $110. Determine the price of a two-year American put option with...
g) European call with a strike price of $40 costs $7. European put with the same strike price and expiration date costs $6. Assume that you buy two calls and one put (strap strategy). Sketch the graph and write down functions of payoff and profit h) Consider a stock with a price of $50 and there is European put option on that stock with the strike of $55 and premium of $4. Assume that you buy 1/3 of a stock...
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