A 1-year European put option on a stock with strike price of $50 is quoted as...
A 1-year European put option on a stock with strike price of $50 is quoted as $7; a 1-year European call option on the same stock with strike price $30 is quoted as $5. Suppose you long one put and short one call (one option is on 100 share).
a) Draw the payoff diagram for your put position and call position. (5 points)
b) After 1-year, stock price turns out to be $45. What is your total payoff? What is your total profit/loss?
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A 1-year European put option on a stock with strike price of $50
is quoted as...
Exercise 1. An investor has a short position in a European put on a share for $4. The stock price is $40 and the strike price is $41 Under what cicum be cuercise (b) Under what circumstance does the...
Exercise 1. An investor has a short position in a European put on a share for $4. The stock price is $40 and the strike price is $41 Under what cicum be cuercise (b) Under what circumstance does the investor make a profit? (c) Draw a payoff diagram plotting the investor's payoff as a function of Sr. (d) Draw a profit diagram plotting the investor's profit as a function of ST. (e) Suppose now the investor enters also into a...
You purchase a European put option on XYZ stock with strike price 50. What is the...
You purchase a European put option on XYZ stock with strike price 50. What is the payoff to the option if XYZ stock is trading at 48 on the expiration day? You purchase a 1-year European call option on ABC stock with strike price 100. The option premium is $10. The effective annual interest rate is 10%, so that 100 dollars lent for 1 year will return 110 dollars. What is the PROFIT if ABC stock is trading at 111...
g) European call with a strike price of $40 costs $7. European put with the same...
g) European call with a strike price of $40 costs $7. European put with the same strike price and expiration date costs $6. Assume that you buy two calls and one put (strap strategy). Sketch the graph and write down functions of payoff and profit h) Consider a stock with a price of $50 and there is European put option on that stock with the strike of $55 and premium of $4. Assume that you buy 1/3 of a stock...
A one-year European call option on Stanley Industries stock with a strike price of $55 is...
A one-year European call option on Stanley Industries stock with a strike price of $55 is currently trading for $75 per share. The stock pays no dividends. A one-year European put option on the stock with a strike price of $55 is currently trading for $100. If the risk-free interest rate is 10 percent per year, then what is the current price on one share of Stanley stock assuming no arbitrage?
A European call option and put option on a stock both have a strike price of...
A European call option and put option on a stock both have a strike price of $45 and an expiration date in six months. Both sell for $2. The risk-free interest rate is 5% p.a. The current stock price is $43. There is no dividend expected for the next six months. a) If the stock price in three months is $48, which option is in the money and which one is out of the money? b) As an arbitrageur, can...
Question 7: Consider a European call option and a European put option on a non dividend-paying...
Question 7: Consider a European call option and a European put option on a non dividend-paying stock. The price of the stock is $100 and the strike price of both the call and the put is $103, set to expire in 1 year. Given that the price of the European call option is $10.57 and the risk-free rate is 5%, what is the price of the European put option via put-call parity? Question 8: Suppose a trader buys a call...
Ou sell (write) four call option contracts with a strike price of $27.50 and an option remium of ...
32 33 please!!!
ou sell (write) four call option contracts with a strike price of $27.50 and an option remium of $0.66. At expiration, the stock was selling for $26.90 a share. What is the total profit or loss on your option position? 2) You purchased three put option contracts with a strike price of $30 and a premium of $o.90 At expiration, the stock was selling for $24.80 a share. What is the total profit or loss on your...
The price of a European call option on a non-dividend-paying stock with a strike price of...
The price of a European call option on a non-dividend-paying stock with a strike price of $50 is $6. The stock price is $51, the continuously compounded risk-free rate (all maturities) is 6% and the time to maturity is one year. What is the price of a one-year European put option on the stock with a strike price of $50? $2.09 $7.52 $3.58 $9.91
You own a put option on Ford stock with a strike price of $14. The option...
You own a put option on Ford stock with a strike price of $14. The option will expire in exactly six months' time. When you bought the put, its cost to you was $2. The option will expire in exacly six months' time. a. If the stock is trading at $10 in six months, what will be the payoff of the put? What will be the profit of the put? b. If the stock is trading at $25 in six...
You own a put option on Ford stock with a strike price of $11. The option...
You own a put option on Ford stock with a strike price of $11. The option will expire in exactly six months' time. When you bought the put, its oost to you was $2. The option will expire in exactly six months' time. a. If the stock is trading at $7 in six months, what will be the payoff of the put? What will be the profit of the put? b. If the stock is trading at $20 in six...
Exercise 1. An investor has a short position in a European put on a share for $4. The stock price is $40 and the strike price is $41 Under what cicum be cuercise (b) Under what circumstance does the investor make a profit? (c) Draw a payoff diagram plotting the investor's payoff as a function of Sr. (d) Draw a profit diagram plotting the investor's profit as a function of ST. (e) Suppose now the investor enters also into a...
You purchase a European put option on XYZ stock with strike price 50. What is the payoff to the option if XYZ stock is trading at 48 on the expiration day? You purchase a 1-year European call option on ABC stock with strike price 100. The option premium is $10. The effective annual interest rate is 10%, so that 100 dollars lent for 1 year will return 110 dollars. What is the PROFIT if ABC stock is trading at 111...
g) European call with a strike price of $40 costs $7. European put with the same strike price and expiration date costs $6. Assume that you buy two calls and one put (strap strategy). Sketch the graph and write down functions of payoff and profit h) Consider a stock with a price of $50 and there is European put option on that stock with the strike of $55 and premium of $4. Assume that you buy 1/3 of a stock...
32 33 please!!!
ou sell (write) four call option contracts with a strike price of $27.50 and an option remium of $0.66. At expiration, the stock was selling for $26.90 a share. What is the total profit or loss on your option position? 2) You purchased three put option contracts with a strike price of $30 and a premium of $o.90 At expiration, the stock was selling for $24.80 a share. What is the total profit or loss on your...
You own a put option on Ford stock with a strike price of $14. The option will expire in exactly six months' time. When you bought the put, its cost to you was $2. The option will expire in exacly six months' time. a. If the stock is trading at $10 in six months, what will be the payoff of the put? What will be the profit of the put? b. If the stock is trading at $25 in six...
You own a put option on Ford stock with a strike price of $11. The option will expire in exactly six months' time. When you bought the put, its oost to you was $2. The option will expire in exactly six months' time. a. If the stock is trading at $7 in six months, what will be the payoff of the put? What will be the profit of the put? b. If the stock is trading at $20 in six...
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