A particular call gives the buyer the option to buy stock at $25. It expires in...
A particular call gives the buyer the option to buy stock at $25. It expires in six months and currently sells for $4 when the stock is currently priced at $26.
- What is the intrinsic value of the call?
- What is the time premium paid for the call?
- What will the value of this call be after 6 months if the price of the stock is $40?
- What will the profit on the position be after six months if the price of the stock is $20?
- If an individual sells this call naked, what will the profit or loss be on the position after six months if the price of the stock is $40?
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A particular call gives the buyer the option to buy stock at
$25. It expires in...
questions 25-28 please 25. You buy a call option on Boeing Corp with an exercise price...
questions 25-28 please
25. You buy a call option on Boeing Corp with an exercise price of $40 and an expiration date in September, and you write a call option on Boeing Corp with an exercise price of $40 and an expiration date in October. This strategy is called a A. Time spread B. Long straddle C. Short straddle D. Money spread E. None of the above 26. The maximum loss a buyer of a stock's call option can suffer...
Open Buying a Call Stock Option Open Buying a Put Stock Option Number Strike Stock Call...
Open Buying a Call Stock Option Open Buying a Put Stock Option Number Strike Stock Call Number Strike Stock Put of Contracts Price Price Premium of Contracts Price Price Premium 1 36 35 1.25 1 36 35 1.45 Intrinsic Value Intrinsic Value Time Value Time Value Cost Cost Close Close Number Strike Stock Call Number Strike Stock Put of Contracts Price Price Premium of Contracts Price Price Premium 1 36 40 4.25 1 36 40 0.05 Intrinsic Value Intrinsic Value...
You have written a call option on Walmart common stock. The option has an exercise price...
You have written a call option on Walmart common stock. The option has an exercise price of $78, and Walmart's stock currently trades at $76. The option premium is $1.45 per contract a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit if Walmart's stock price decreases to $74 and stays there until the option expires? c. What is your net profit on the option if Walmart's stock price...
You have written a call option on Walmart common stock. The option has an exercise price...
You have written a call option on Walmart common stock. The option has an exercise price of $87, and Walmart’s stock currently trades at $85. The option premium is $1.25 per contract. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit if Walmart’s stock price decreases to $83 and stays there until the option expires? c. What is your net profit on the option if Walmart’s stock price...
You are considering buying a call option for Bernie Bros, a company that is building a...
You are considering buying a call option for Bernie Bros, a company that is building a series of assisted living homes for aging hippies. Bernie Bros current stock price is $42.20, and the call option you are looking at sells for $5.85 with a $40.00 strike price and six months to expiration. a. What is the intrinsic value of this option today? b. What is the premium of this option today? c. Draw a payoff graph for this option with...
A put option that expires in six months with an exercise price of $45 sells for...
A put option that expires in six months with an exercise price of $45 sells for $2.34. The stock is currently priced at $48, and the risk-free rate is 3.5 percent per year, compounded continuously. What is the price of a call option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Call priceſ A call option with an exercise price of $70 and four months to expiration has...
Please solve by hand and not on the computer. Thanks. Use the option quote information shown...
Please solve by hand and not on the computer. Thanks.
Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $85 Calls Last 2.80 6.00 8.50 10.20 160 127 1.40 3.90 3.65 170 a. Are the call options in the money? What is the intrinsic value of an RWI Corp. call option? b. Are the put options in the money? What is the intrinsic value of an RWJ Corp. put option?...
A put option that expires in six months with an exercise price of $45 sells for...
A put option that expires in six months with an exercise price of $45 sells for $4.80. The stock is currently priced at $41, and the risk-free rate is 3.3 percent per year, compounded continuously. What is the price of a call option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
You have taken a long position in a call option on IBM common stock. The option...
You have taken a long position in a call option on IBM common stock. The option has an exercise price of $147 and IBM's stock currently trades at $152. The option premium is $6 per contract. a. How much of the option premium is due to intrinsic value versus time value? Option Premium Intrinsic value $ Time value b. What is your net profit on the option if IBM’s stock price increases to $162 at expiration of the option and...
You have taken a long position in a call option on IBM common stock. The option...
You have taken a long position in a call option on IBM common stock. The option has an exercise price of $148 and IBM's stock currently trades at $153. The option premium is $7 per contract. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit on the option if IBM’s stock price increases to $163 at expiration of the option and you exercise the option? c. What is...
questions 25-28 please
25. You buy a call option on Boeing Corp with an exercise price of $40 and an expiration date in September, and you write a call option on Boeing Corp with an exercise price of $40 and an expiration date in October. This strategy is called a A. Time spread B. Long straddle C. Short straddle D. Money spread E. None of the above 26. The maximum loss a buyer of a stock's call option can suffer...
You have written a call option on Walmart common stock. The option has an exercise price of $78, and Walmart's stock currently trades at $76. The option premium is $1.45 per contract a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit if Walmart's stock price decreases to $74 and stays there until the option expires? c. What is your net profit on the option if Walmart's stock price...
A put option that expires in six months with an exercise price of $45 sells for $2.34. The stock is currently priced at $48, and the risk-free rate is 3.5 percent per year, compounded continuously. What is the price of a call option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Call priceſ A call option with an exercise price of $70 and four months to expiration has...
Please solve by hand and not on the computer. Thanks.
Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $85 Calls Last 2.80 6.00 8.50 10.20 160 127 1.40 3.90 3.65 170 a. Are the call options in the money? What is the intrinsic value of an RWI Corp. call option? b. Are the put options in the money? What is the intrinsic value of an RWJ Corp. put option?...
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