Exhibit 14.4
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM
Consider the following information on put and call options for
Citigroup
Strike Price | Put Price | Call Price |
$32.50 | $2.85 | $1.65 |
Refer to Exhibit 16.4. Calculate the payoffs of a short straddle at
a stock price at expiration of $20 and a stock price at expiration
of $45.
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SEE THE IMAGE. ANY DOUBTS,
FEEL FREE TO ASK. THUMBS UP PLEASE
Exhibit 14.4 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM Consider the following information on put...
Using the table and information below to calculate the following: The value of the stock is currently $87, and expiration is Jan 16, Feb 16, and March 16. Briefly discuss your results. Strike Jan call Feb call March call Jan put Feb put March put 80 4.0 5.5 7.1 1.8 1.9 3.0 85 3.2 4.3 6.0 2.3 3.5 4.0 90 2.6 3.8 4.4 3.2 4.0 5.8 95 1.9 2.1 3.2 4.5 5.2 6.9 Complete the profit/loss tables for 80, 85,...
A call option on a stock with a strike price of $60 costs $8. A put option on the same stock with the same strike price costs $6. They both expire in 1 year. (a) How can these two options be used to create a straddle? (b) What is the initial investment? (c) Construct a table showing how the payoff and profit varies with ST in 1 year, for the straddle that you constructed. Whenever you need to refer to...
Q3. a) Given the following information, please explain why some investors believe MNRA stock price will increase before 10/16/2020. 5/19/20 10/16/20 5/20/20 10/16/20 Date Expiration date Strike Price Spot price $100.00 $71.67 $73.47 Option quotes Implied volatility Call $15.30 134.91% Put $42.75 130.37% Call $16.15 131.06% Put $42.15 125.47% b) What is the probability of losing money if an investor constructs a long straddle on May 20, 2020? Assume the expected annualized stock return is 12%.
Exhibit 14.4 The current stock price of ABC Corporation is $53.50. ABC Corporation has the following put and call option prices that expire six months from today. The risk-free rate of return is 5 percent, and the expected return on the market is 11 percent. Exercise Price Put Price Call Price 50 $1.50 $5.75 55 $3.25 --- Refer to Exhibit 14.4. What should the price be of a call option that expires six months from today with an exercise price...
04: Which one of the following situations will produce the me Assume the options are all in-the-money. Wations will produce the highest put price, all else constant? A. $15 strike price; 45 days to option expiration B. $15 strike price: 60 days to option expiration C. $20 strike price; 45 days to option expiration D. $20 strike price; 60 days to option expiration E. Insufficient information is provided to answer this question Q5: You know that a call will finish...
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...
Use the following information for Q10, Q11 and Q12. It is July and Toyota's stock price is ¥6,561 on the Tokyo Stock Exchange. Your analysis suggests that Toyota's stock is overvalued and is worth 9% less than it trades for today. There are September expiration call and put options with a strike of ¥6300. The call premium is ¥390 per share and the put premium is ¥121 per share. The contract is for 1,000 shares. You decide to speculate on...
Use the information in this table for Q16. Stock Price Call Premium Put Premium Strike Price W3250 V385 V105 V3000 Q16. An investor undertakes a covered call strategy, executing both the 6 points stock and three month options trades at current market prices shown in the table above. The investor plans on selling the stock when the option expires in three months time. Calculate the total profit and loss from these trades if the stock price in three months time...
Use the following information for questions 9 and 10 below. You may assume (for simplicity) that both put and call option contracts for gold are for a quantity of one ounce of gold. Both the put and call options have the same maturity. The premium for the call is $2/ounce and the premium for the put is $1/ounce. Both options have a strike price of $1100/ounce. An investor writes (or sells) one put option contract. If the price of gold...
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 $ ...