The put option is givng the rights to sell $50 where currently seling price is $55 so this optioin is out of money. it would not be beneficial becase currently selling price is $55.It should not be exercise.
Problem 2: The current stock of STC is selling for $45 and the exercise price of...
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...
Open Buying a Call Stock Option Open Buying a Put Stock Option Number Strike Stock Call Number Strike Stock Put of Contracts Price Price Premium of Contracts Price Price Premium 1 36 35 1.25 1 36 35 1.45 Intrinsic Value Intrinsic Value Time Value Time Value Cost Cost Close Close Number Strike Stock Call Number Strike Stock Put of Contracts Price Price Premium of Contracts Price Price Premium 1 36 40 4.25 1 36 40 0.05 Intrinsic Value Intrinsic Value...
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...
7- On January 11, I purchased a call and a put on Exxon with exercise price of $50 and March 15, maturity when Exxon was selling for $55 at a total cost of $11. On January 21,Exxon falls to $45 and I decide to close my position by exercising (assuming in the money) both my options. Compute my profit/loss. PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
The current stock price of Johnson & Johnson is $50, and the stock does not pay dividends. The instantaneous risk-free rate of return is 3%. The instantaneous standard deviation of J&J's stock is 30%. You want to purchase a put option on this stock with an exercise price of $41 and an expiration date 55 days from now. Using Black-Scholes, the put option should be worth ______ today.
The current price of a stock is $ 48.36 and the annual risk-free rate is 5.3 percent. A put option with an exercise price of $55 and one year until expiration has a current value of $ 7.82 . What is the value of a call option written on the stock with the same exercise price and expiration date as the put option? Show your answer to the nearest .01. Do not use $ or , in your answer. Because...
T-bills currently yield 3.7 percent. Stock in Deadwood Manufacturing is currently selling for $74 per share. There is no possibility that the stock will be worth less than $67 per share in one year. a-1 What is the value of a call option with a $55 exercise price? (Round your answer to 2 decimal places, e.g., 32.16.) Call option value $ a-2 What is the intrinsic value? Intrinsic value $ b-1 What is the value of a call option with...
Suppose you are given the following information: Current Price of the GPRO stock: Strike Price of a 1 year call option: Market Price (premium) of the call option: Strike Price of a 1 year put option: Market Price (premium) of the put option: $4.30 $7.00 $0.49 $7.00 $3.08 (a) What is the maximum amount the buyer of the call option can gain (per share)? [2 Points] (b) What is the maximum amount the seller of the call option can lose...
6. A call option has an exercise price of $45 and a premium of $4. If the price of the underlying stock is $60, the total payoff of the option is ____? 7. A put option has an exercise price of $20 and a premium of $2. If the price of the underlying stock is $11, what of the total payoff of the option? 8. You write a call option with an exercise price of $67 and a premium of...
A put option on a stock with a current price of $53 has an exercise price of $55. The price of the corresponding call option is $5.25. According to put-call parity, if the effective annual risk-free rate of interest is 5% and there are four months until expiration, what should be the price of the put?