Maximum possible profit is attained when the stock price of Microsoft goes to zero.
The pay off of put option upon expiry = Strike price - Stock price
= $ 72-0
= $ 72
Maximum possible profit = Profit from put option - premium paid
= $ 72 - $ 1.32
= $ 70.68
Hence, the correct answer is $ 70.68
You purchase one Microsoft July $72 put contract for a premium of $1.32. What is your...
You purchase one Microsoft July $72 put contract for a premium of $1.32. What is your maximum possible profit?
What is your maximum possible profit if you long one Apple, Inc. July 74 put contract with a premium of $2.59?
You write one MBI July 120 put contract (equaling 100 shares) for a premium of $5. The option is held until the expiration date, when MBI stock sells for $123 per share. You will realize a ______ on the investment. Multiple Choice $300 loss $300 profit $500 profit $800 profit
You write one MBI July 120 put contract (equaling 100 shares) for a premium of $5. The option is held until the expiration date, when MBI stock sells for $123 per share. You will realize a ______ on the investment. Multiple Choice A) $500 profit B) $300 profit C) $800 profit D) $300 loss
Question 5 10 points Save Ans You buy one IBM July 90 call contract for a premium of $4 each share and one put contract for a premium of $2 each share. You hold the position until the expiration date when IBM stock sells for $97 per share. What is your total profit or loss? Remember each contract has 100 shares Sethimet
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3 question (10%). Required: Draw a profit or loss graph for the purchase of put contract with exercise price of s30 for which a SS premium is paid a. b. Identify the break-even point, maximum profit, and maximum posses Dr.oec. A. Cirjevskis, professor 09.01.2019
Microsoft (MSFT) + IMSETI Underlying stock price = $71.75 Expiration Strike Call Put June 16, 2017 70 2.02 0.24 June 16, 2017 72 0.67 0.90 June 16, 2017 74 0.132.37 70 July 7, 2017 July 7, 2017 July 7, 2017 72 2.400.58 1.15 1.32 0.42 2.59 74 Refer to Figure 15.1, which lists the prices of various Microsoft options. Use the data in the figure to calculate the payoff and the profit/loss for investments in each of the following July...
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