Homework Answers
Call option is the right to buy a specified security at a specified price on a future date.
The option is exercised when the market price is higher than the strike price
A-1 Yes, the call will be exercised
a-2 Net profit = Market price – exercise price – premium paid
= (150 – 135-8.05)*20
= $139
Rate of return = Net profit/Premium
= 139/161
= 86.34%
Yes
Profit = (150-145-2.50)*20
= $50
Return = 50/50
= 100%
Put option is the right to sell a specified security at a specified price on a future date.
No, since strike price is lower than market price
Rate = -100%
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Refer to the stock options on Apple in the Figure 2.10: Suppose you buy an June...
Refer to the stock options on Apple in the Figure 2.10. Suppose you buy a September...
Refer to the stock options on Apple in the Figure 2.10. Suppose
you buy a September expiration call option on 100 shares with
exercise price $100.
a-1. If the stock price in September is $102,
will you exercise your call?
Yes
No
a-2. What is the net profit/loss on your
position? (Negative value should be
indicated by a minus sign.)
(Click to select)Net Profit/ Net
Loss $
a-3. What is the rate of return on your
position? (Round your answer...
od 2 PS (Problem Sets) Refer to the stock options on Apple in the Egure 210....
od 2 PS (Problem Sets) Refer to the stock options on Apple in the Egure 210. Suppose you buy an May expiration call option on 100 shares with the excise price of $140. 6-1. If the stock price in May is $152, will you exercise your call?! Yes NO 6-2. What is the net profit loss on your position? (input the amount as a positive value.) 6-3. What is the rate of return on your position (Negative value should be...
Problem 2-18 Refer to Table 2.7 and look at the IBM options. Suppose you buy a...
Problem 2-18 Refer to Table 2.7 and look at the IBM options. Suppose you buy a July 2016 expiration call option with exercise price $150. a-1. Suppose the stock price in July is $153.70. Will you exercise your call? • Yes No a-2. What is the profit (loss) on your position? (Enter your answer as a positive value rounded to 2 decimal places.) Table 2.7 Explration Strike Call Put 6.60 1.57 3.30 Prices of stock options on IBM, May 10,...
Suppose you buy a June expiration call option on 30 shares of Apple stock with the...
Suppose you buy a June expiration call option on 30 shares of Apple stock with the exercise price of $240. If the stock price is $256 in June (just before expiration) – would you exercise this option? A. Yes B. No C. Impossible to determine D. You would have to wait until after the expiration date
Suppose you buy a May expiration call option on 100 shares (@ $3.80) with the excise...
Suppose you buy a May expiration call option on 100 shares (@ $3.80) with the excise price of $140. a.) If the stock price in May is $152, will you exercise your call? (Yes or No) What is the net profit/loss on your position? What is the rate of return on your position? b.) What if you had bought an May put option on 100 shares with exercise price $140 at a price of ($2.71) instead? Would you exercise the...
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in...
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profits for investments in each of the following June 2017 expiration options, assuming that the stock price on the expiration date is $71. (Leave no cells blank - be certain to enter "O" wherever required. Loss amounts should be indicated by a minus sign. Round "Profit/Loss"to 2 decimal places.) Payoff Profit/Loss a. Call option, X =...
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in...
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following July 2017 expiration options on a single share, assuming that the stock price on the expiration date is $84. (Leave no cells blank - be certain to enter "O" wherever required. Loss amounts should be indicated by a minus sign. Round "Profit/Loss" to 2 decimal places.) Payoff Profit/Loss...
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in...
Refer to Figure 15.1, which lists the prices of various
Microsoft options. Use the data in the figure to calculate the
payoff and the profit/loss for investments in each of the following
June 2017 expiration options on a single share, assuming that the
stock price on the expiration date is $82. (Leave no cells blank -
be certain to enter "0" wherever required. Loss amounts should be
indicated by a minus sign. Round "Profit/Loss" to 2 decimal
places.)
figure 15.1...
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in...
Refer to Figure 15.1, which lists the prices of various
Microsoft options. Use the data in the figure to calculate the
payoff and the profits for investments in each of the following
June 2017 expiration options, assuming that the stock price on the
expiration date is $71. (Leave no cells blank - be certain
to enter "0" wherever required. Loss amounts should be indicated by
a minus sign. Round "Profit/Loss"to 2 decimal places.)
(figure 15.1)
payoff
profit/loss
a.
call option,...
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the p...
Refer to Figure 15.1, which lists the prices of various
Microsoft options. Use the data in the figure to calculate the
payoff and the profits for investments in each of the following
June 2017 expiration options, assuming that the stock price on the
expiration date is $71.
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profits for investments in each of the following June...
Refer to the stock options on Apple in the Figure 2.10. Suppose
you buy a September expiration call option on 100 shares with
exercise price $100.
a-1. If the stock price in September is $102,
will you exercise your call?
Yes
No
a-2. What is the net profit/loss on your
position? (Negative value should be
indicated by a minus sign.)
(Click to select)Net Profit/ Net
Loss $
a-3. What is the rate of return on your
position? (Round your answer...
od 2 PS (Problem Sets) Refer to the stock options on Apple in the Egure 210. Suppose you buy an May expiration call option on 100 shares with the excise price of $140. 6-1. If the stock price in May is $152, will you exercise your call?! Yes NO 6-2. What is the net profit loss on your position? (input the amount as a positive value.) 6-3. What is the rate of return on your position (Negative value should be...
Problem 2-18 Refer to Table 2.7 and look at the IBM options. Suppose you buy a July 2016 expiration call option with exercise price $150. a-1. Suppose the stock price in July is $153.70. Will you exercise your call? • Yes No a-2. What is the profit (loss) on your position? (Enter your answer as a positive value rounded to 2 decimal places.) Table 2.7 Explration Strike Call Put 6.60 1.57 3.30 Prices of stock options on IBM, May 10,...
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profits for investments in each of the following June 2017 expiration options, assuming that the stock price on the expiration date is $71. (Leave no cells blank - be certain to enter "O" wherever required. Loss amounts should be indicated by a minus sign. Round "Profit/Loss"to 2 decimal places.) Payoff Profit/Loss a. Call option, X =...
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following July 2017 expiration options on a single share, assuming that the stock price on the expiration date is $84. (Leave no cells blank - be certain to enter "O" wherever required. Loss amounts should be indicated by a minus sign. Round "Profit/Loss" to 2 decimal places.) Payoff Profit/Loss...
Refer to Figure 15.1, which lists the prices of various
Microsoft options. Use the data in the figure to calculate the
payoff and the profit/loss for investments in each of the following
June 2017 expiration options on a single share, assuming that the
stock price on the expiration date is $82. (Leave no cells blank -
be certain to enter "0" wherever required. Loss amounts should be
indicated by a minus sign. Round "Profit/Loss" to 2 decimal
places.)
figure 15.1...
Refer to Figure 15.1, which lists the prices of various
Microsoft options. Use the data in the figure to calculate the
payoff and the profits for investments in each of the following
June 2017 expiration options, assuming that the stock price on the
expiration date is $71. (Leave no cells blank - be certain
to enter "0" wherever required. Loss amounts should be indicated by
a minus sign. Round "Profit/Loss"to 2 decimal places.)
(figure 15.1)
payoff
profit/loss
a.
call option,...
Refer to Figure 15.1, which lists the prices of various
Microsoft options. Use the data in the figure to calculate the
payoff and the profits for investments in each of the following
June 2017 expiration options, assuming that the stock price on the
expiration date is $71.
Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profits for investments in each of the following June...
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