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The common stock of Triangular File Company is selling at $93. A 26-week call option written...
Assume that the stock price is $56, call option price is $9, the put option price is...
Assume that the stock price is $56, call option price is $9, the put option price is $5, risk-free rate is 5%, the maturity of both options is 1 year , and the strike price of both options is 58. An investor can __the put option, ___the call option, ___the stock, and ______ to explore the arbitrage opportunity. A. sell, buy, short-sell, borrow B. buy, sell, buy, borrow C. sell, buy, short-sell, lend D. buy, sell, buy, lend
A call option has an exercise price of $50. At the final exercise date, the stock...
A call option has an exercise price of $50. At the final exercise date, the stock price could be either $25 or $75. Which investment would combine to give the same payoff as the stock? Lend the present value (PV) of $25 and buy two calls. Lend the present value (PV) of $25 and sell two calls. Borrow $25 and buy two calls. Borrow $25 and sell two calls.
Use the option quote information shown here to answer the questions that follow. The stock is...
Use the option quote information shown here to answer the
questions that follow. The stock is currently selling for $114, and
the size of each contract is 100 shares.
a. Suppose you buy 10 contracts of the
February 110 call option. How much will you pay, ignoring
commissions?
b-1. Suppose you buy 10 contracts of
the February 110 call option and also suppose that Macrosoft stock
is selling for $140 per share on the expiration date. How much is
your...
5. A call option on Company B common stock is worth $8 with 7 months before...
5. A call option on Company B common stock is worth $8 with 7 months before expiration. The strike price on the call is $40 and the price per share is currently trading at $44 per share. The put option at the same exercise price is worth $1.50. a. Is the call option in or out or the money? b. Is the put option in or out of the money? c. At what extra above expiration value is the call...
2. (15 points) Suppose that you traded the following options on Facebook’s stock: a. Sold 1 call...
2. (15 points) Suppose that you traded the following options on Facebook’s stock: a. Sold 1 call option with an exercise price of $250 at the price of $40; b. Sold 1 put option with an exercise price of $250 at the price of $30; and c. Bought 1 call option with an exercise price of $300 at the price of $22. Also, suppose that: i. All options are European; ii. The options expire one year from now; and iii. As...
Problem 22-6 Put-Call Parity A stock is currently selling for $73 per share. A call option...
Problem 22-6 Put-Call Parity A stock is currently selling for $73 per share. A call option with an exercise price of $77 sells for $3.65 and expires in three months. If the risk-free rate of interest is 3.3 percent per year, compounded continuously, what is the price of a put option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Put price
Use the option quote information shown here to answer the questions that follow. The stock is...
Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $43. Calls Puts Strike Option Expiration Price Vol. Last Vol. Last Macrosoft Feb 45 101 1.83 56 2.83 Mar 45 77 2.07 38 3.24 May 45 38 2.35 27 3.66 Aug 45 19 2.56 19 3.70 a. Suppose you buy 26 contracts of the February 45 call option. How much will you pay, ignoring commissions? Cost $ ...
Consider a call option and a put option written on the stock XYZ. Both call and...
Consider a call option and a put option written on the stock XYZ. Both call and put have a strike of $50. Stock XYZ has the following quotations in the market: 7. Bid Ask $49.90 $50.20 the money Then the call option is the money; the put option is A. in; in B. in; out C. out; in D. out; out E. at; at 8 You need to invest in two assets: a risk-free asset with a return of 5%...
Question 12 2 pts A stock is currently selling for $41 per share. A call option...
Question 12 2 pts A stock is currently selling for $41 per share. A call option with an exercise price of $45 sells for $3.17 and expires in three months. If the risk-free rate of interest is 4.42 % per year, compounded continuously, what is the price of a put option with the same exercise price? (Round answer to 2 decimal places. Do not round intermediate calculations). Topic: Put-Call Parity
Use the option quote information shown here to answer the questions that follow. The stock is...
Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $43 Calls Puts Strike Vol 101 Vol 56 38 27 19 Last 2.83 3.24 3.66 3.70 Option Expiration Price Macrosoft Feb Mar May Aug 45 45 45 45 Last 1.83 2.07 2.35 2.56 38 19 a. Suppose you buy 26 contracts of the February 45 call option. How much will you pay, ignoring commissions? Answer is complete and correct. Cost 4,758...
A call option has an exercise price of $50. At the final exercise date, the stock price could be either $25 or $75. Which investment would combine to give the same payoff as the stock? Lend the present value (PV) of $25 and buy two calls. Lend the present value (PV) of $25 and sell two calls. Borrow $25 and buy two calls. Borrow $25 and sell two calls.
Use the option quote information shown here to answer the
questions that follow. The stock is currently selling for $114, and
the size of each contract is 100 shares.
a. Suppose you buy 10 contracts of the
February 110 call option. How much will you pay, ignoring
commissions?
b-1. Suppose you buy 10 contracts of
the February 110 call option and also suppose that Macrosoft stock
is selling for $140 per share on the expiration date. How much is
your...
Problem 22-6 Put-Call Parity A stock is currently selling for $73 per share. A call option with an exercise price of $77 sells for $3.65 and expires in three months. If the risk-free rate of interest is 3.3 percent per year, compounded continuously, what is the price of a put option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Put price
Consider a call option and a put option written on the stock XYZ. Both call and put have a strike of $50. Stock XYZ has the following quotations in the market: 7. Bid Ask $49.90 $50.20 the money Then the call option is the money; the put option is A. in; in B. in; out C. out; in D. out; out E. at; at 8 You need to invest in two assets: a risk-free asset with a return of 5%...
Question 12 2 pts A stock is currently selling for $41 per share. A call option with an exercise price of $45 sells for $3.17 and expires in three months. If the risk-free rate of interest is 4.42 % per year, compounded continuously, what is the price of a put option with the same exercise price? (Round answer to 2 decimal places. Do not round intermediate calculations). Topic: Put-Call Parity
Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $43 Calls Puts Strike Vol 101 Vol 56 38 27 19 Last 2.83 3.24 3.66 3.70 Option Expiration Price Macrosoft Feb Mar May Aug 45 45 45 45 Last 1.83 2.07 2.35 2.56 38 19 a. Suppose you buy 26 contracts of the February 45 call option. How much will you pay, ignoring commissions? Answer is complete and correct. Cost 4,758...
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