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The spot price of the market index is $900. After 3 months the market index is...
the spot price of the market index is $900. After 3 months the market index is priced at $920. The annual rate of interest on treasuries is 2.4% (0.2% per month). the premium on the long put, with an exercise price of $930, is $8.00. At what index price does a long put investor have the same payoff as a short index investor? Assume the short position has a breakeven price of $930.
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35. The spot price of the market index is $900. After 3 months the market index is priced at $920. The annual rate of interest on treasuries is 4.8% (0.4% per month). The premium on the long put, with an exercise price of $930, is $8.00. Calculate the profit or loss to the short put position if the final index price is $915. A) $15.00 gain anlwollators to dallwoma siis yninis salos bow ozovni strani nodw. B)...
Refers to the information below: S&R index level today (t=0) 900 Forward price (T=3 months) 918 Annualized 3-month interest rate 8% p.a. Call option Premium (Strike = 900) 62.57 Put option Premium (Strike = 900) 44.92 Dividend Yield 0% S&R index level 3 months later 930 (i) What is your profit 3 months later if you have taken a long position on the stock at t=0? (ii) What is your profit 3 months later if you have taken a short...
A strategy consists of longing a put on the market index with a strike of 820 and shorting a call option on the market index with a strike price of 820. The put premium is $16.25 and the call premium is $40.43. Interest rate is 0.5% per month. What is the breakeven price of the market index for this strategy at expiration (in 6 months)? A. $844.18 B. $795.82 C. $844.91 D. $795.08
1. Consider a call option selling for $ 4 in which the exercise price is $50. A) Determine the value at expiration and the profit for a buyer under the following outcomes: i. The price of the underlying at expiration is $55 ii. The price of the underlying at expiration is $51 iii. The price of the underlying at expiration is $48 B) Determine the value at expiration and the profit for a seller under the following outcomes: i. The...
Consider a put option on a share of Apple Stock (current spot price = $175) with an expiration of March 15, 2019 and a strike of $170. One contract is for 50 shares and has a premium of $450.00. What is the breakeven point of this contract? If the spot price of Apple at maturity is $165, then what is the profit from one long contract?
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...
Option Strategies 3 A call option expiring in two months has a strike price of $97.00 and is trading at a premium of c=$12.50. A put option expiring in two months has a strike price of $87.00 and is trading at a premium of p=$3.36. Find the higher expiration-date stock price at which a long strangle would break even.
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 expiry is $62 Profit for the long position if the stock price at expiry is $55 • What is the breakeven stock price at expiration (price at which the option cost is covered for the long position) 3) The share price of Win Big Inc....
A call option has a premium of $0.60, a strike price of $40, and 3 months to expiration. The current stock price is $39.60. The stock will pay a $0.80 dividend two months from now. The risk-free rate is 3 percent. What is the premium on a 3-month put with a strike price of $40? Assume the options are European style.