A put option with the strike price of $23 on the stock of Green Lake Corp. expires today. The current price of the stock is $24.50. Which one of the following best describes this option? exercised at-the-money in-the-money out-of-the-money
Out of money because strike price is lower than expiration price
Payoff = Max(strike -expiration price-premium,-premium)
A put option with the strike price of $23 on the stock of Green Lake Corp. expires today. The current price of the stock is $24.50. Which one of the following best describes this option? exercised at-...
Suppose that a call option with a strike price of $48 expires in one year and has a current market price of $5.15. The market price of the underlying stock is $46.24, and the risk-free rate is 1%. Use put-call parity to calculate the price of a put option on the same underlying stock with a strike of $48 and an expiration of one year. 1. The price of a put option on the same underlying stock with a strike...
The breakeven stock price for a long put option is £24.50. If the put premium is £3.50, and the call premium is £4.50, then the exercise price of the put is closest to: £21.00 £24.50 £28.00 £31.50 Unable to determine from the given information Mrs. Green is a 30-year-old marketing professional who is investing for retirement. Mrs. Green wants her investment portfolio to provide rates of return greater than the inflation rate. Mrs. Green is willing to accept a relatively...
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...
A: Long one in-the-money call option with strike (current stock price −$3) and one out-of-the money call option with strike (current stock price +$3) B: Long two at-the-money call options. All options are on the same asset and have the same maturity. Which one is better?
You hold an American option to sell one share of Sandhill Co. stock. The option expires tomorrow. The strike price of the option is $49, and the current stock price is $44. What is the value of exercising the option today? Value of the option is $enter the dollar value of the option . If you wanted to sell the option instead, about how much would you expect to receive? You should expect to receive select an option ...
Eagletron's current stock price is $ $10. Suppose that over the current year, the stock price will either increase by 96% or decrease by 51%. Also, the risk-free rate is 25% (EAR). a. What is the value today of a one-year at-the-money European put option on Eagletron stock? b. What is the value today of a one-year European put option on Eagletron stock with a strike price of $19.60? c. Suppose the put options in parts (a) and (b) could...
Eagletron's current stock price is $ 10. Suppose that over the current year, the stock price will either increase by 98% or decrease by 60%. Also, the risk-free rate is 25% (EAR). a. What is the value today of a one-year at-the-money European put option on Eagletron stock? b. What is the value today of a one-year European put option on Eagletron stock with a strike price of $19.80? c. Suppose the put options in parts (a) and (b) could...
The current price of a stock is $75. A put option with a strike price of $70 is purchased along with the stock. If the breakeven point for this hedge is at a stock price of $82, then the value of the put option at the time of purchase was (a) $5 (b) $7 (c) $12 (d) $14 (e) None of the above
The current price of a stock is $75. A put option with a strike price of $70 is purchased along with the stock. If the breakeven point for this hedge is at a stock price of $82, then the value of the put option at the time of purchase was (a) $5 (b) $7 (c) $12 (d) $14 (e) None of the above FIN
The current market price of a share of a stock is $80. If a put option on this stock has a strike price of $75, the put Group of answer choices: a)sells for a lower price than if the market price of the stock is $75. b)is in the money. c)is in the money and sells for a lower price than if the market price of the stock is $75. d)is out of the money and sells for a lower...