Assume you are looking at a call option on Bristol Cities Inc. with an exercise price...
Assume you are looking at a call option on Bristol Cities Inc. with an exercise price of $104. Current stock price today is $102 and the option has a premium of $3. What will be the profit or loss earned by the speculator at prices of $101, $104 and $112 just before time of expiry? Assume the option will not be exercised until maturity.
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Assume you are looking at a call option on Bristol Cities Inc.
with an exercise price...
1) A call option is priced at $7 with an exercise price of $100 and an...
1) A call option is priced at $7 with an exercise price of $100 and an underlying stock price of $98. If the stock price at expiry is $102 determine the following: o Option value for a long position o Profit for a long position 2) A put option is priced at $4 with an exercise price of $60 and an underlying price of $62. Determine the following: o Option value for a long position if the stock price at...
A speculator purchased a call option with an exercise price of $30 for a premium of $4. The option was exercised a few...
A speculator purchased a call option with an exercise price of $30 for a premium of $4. The option was exercised a few days later when the stock price was $35. What was the return to the speculator? o 25 percent 0-25 percent 0 -3.2 percent 0 -2.9 percent
The current market price of a share of Disney stock is $30. If a call option...
The current market price of a share of Disney stock is $30. If a call option on this stock has a strike price of $35, the call is out of the money. is in the money. can be exercised profitably. is out of the money and can be exercised profitably. is in the money and can be exercised profitably. The maximum loss for a writer of a put option on a stock is unlimited. equal to the exercise price. equal...
Henrik's Options. Assume Henrik writes a call option on euros with a strike price of $1.2500/euro...
Henrik's Options. Assume Henrik writes a call option on euros with a strike price of $1.2500/euro at a premium of 3.80cents per euro ($0.0380/euro) and with an expiration date three months from now. The option is for euro100 comma 000. Calculate Henrik's profit or loss should he exercise before maturity at a time when the euro is traded spot at strike prices beginning at $1.10/euro, rising to $1.34/euro in increments of $0.04. The profit or loss should Henrik exercise before...
Henrik's Options. Assume Henrik writes a call option on euros with a strike price of $1.2500/euro...
Henrik's Options. Assume Henrik writes a call option on euros with a strike price of $1.2500/euro at a premium of 3.80cents per euro ($0.0380/euro) and with an expiration date three months from now. The option is for euro100 comma 000. Calculate Henrik's profit or loss should he exercise before maturity at a time when the euro is traded spot at strike prices beginning at $1.10/euro, rising to $1.34/euro in increments of $0.04. The profit or loss should Henrik exercise before...
13. The premium on a pound put option is $.03 per unit. The exercise price is...
13. The premium on a pound put option is $.03 per unit. The exercise price is s1.60. The break-even point for the buyer and seller is? (Assume put option are speculators.) zero transactions costs and that the buyer and seller of the 14. You purchase a call option on pounds for a premium of $.03 per unit, with an exercise price of $1.64; the option will not be exercised until the expiration date, if at all. If the spot rate...
9. You purchase one share of IBM July call option. The exercise price is 120 and...
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...
Consider a European call option on €62,500 with an exercise price of $1.50/€. You pay an...
Consider a European call option on €62,500 with an exercise price of $1.50/€. You pay an option premium of $0.10/€ for the call option today. a. If the $-€ spot exchange rate is $1.62/€ on the contract expiration date, would you exercise the call option (buy € at the exercise price at expiration)? What would be the option payoff and profit? b. If the $-€ spot exchange rate is $1.45/€ on the contract expiration date, would you exercise the call...
You have written a call option on Walmart common stock. The option has an exercise price...
You have written a call option on Walmart common stock. The option has an exercise price of $87, and Walmart’s stock currently trades at $85. The option premium is $1.25 per contract. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit if Walmart’s stock price decreases to $83 and stays there until the option expires? c. What is your net profit on the option if Walmart’s stock price...
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
1) A call option is priced at $7 with an exercise price of $100 and an underlying stock price of $98. If the stock price at expiry is $102 determine the following: o Option value for a long position o Profit for a long position 2) A put option is priced at $4 with an exercise price of $60 and an underlying price of $62. Determine the following: o Option value for a long position if the stock price at...
A speculator purchased a call option with an exercise price of $30 for a premium of $4. The option was exercised a few days later when the stock price was $35. What was the return to the speculator? o 25 percent 0-25 percent 0 -3.2 percent 0 -2.9 percent
13. The premium on a pound put option is $.03 per unit. The exercise price is s1.60. The break-even point for the buyer and seller is? (Assume put option are speculators.) zero transactions costs and that the buyer and seller of the 14. You purchase a call option on pounds for a premium of $.03 per unit, with an exercise price of $1.64; the option will not be exercised until the expiration date, if at all. If the spot rate...
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...
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
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