Suppose PDQ stock is currently selling for $40 and the call with a $40 strike price...
4. Suppose PDQ stock is currently selling for $40 and the call with a $40 strike price on the stock is selling for $2.00 and the call with a $60 strike price is selling for $1.00. Calculate the value of a bearish call spread portfolio if the stock price is $10, $20, $30, $40, $50, $60, $70 and $80. (30 Points)
3. Suppose PDQ's stock is currently selling for $40 and the call with a $40 strike price on the stock is selling for $2.00. Calculate the value of a covered call if the stock price is $20, $30. $40, $50, $60 (10 Points).
You own a call option on Intuit stock with a strike price of $37. When you purchased the option, it cost $5. The option will expire in exactly three months' time. a. If the stock is trading at $50 in three months, what will be the payoff of the call? What will be the profit of the call? b. If the stock is trading at $22 in three months, what will be the payoff of the call? What will be...
6 Imagine that you are holding 5,000 shares of stock, currently selling at $40 per share. You are ready to sell the shares but would prefer to put off the sale until next year due to tax reasons. If you continue to hold the shares until January, however, you face the risk that the stock will drop in value before year-end. You decide to use a collar to limit downside risk without laying out a good deal of additional funds....
A 10-month European call option on a stock is currently selling for $5. The stock price is $64, the strike price is $60. The continuously-compounded risk-free interest rate is 5% per annum for all maturities. a) Suppose that the stock pays no dividend in the next ten months, and that the price of a 10-month European put with a strike price of $60 on the same stock is trading at $1. Is there an arbitrage opportunity? If yes, how can...
A stock is currently selling for $75 per share. You could purchase a call with a strike price of $70 for $7. You could purchase a put with a strike price of $70 for $2. Calculate the intrinsic value of the call option. Calculate the time value of the call option. Calculate the intrinsic value of the put option. Calculate the time value of the put option.
Apple stock is currently selling at 200$. You purchase a 30 day call with a strike price of 200$ for 18$ and 30 day put for the same strike price for 20$. What are your total losses or gain at prices $190, $200, and $210?
A stock is currently selling for $70 per share. You could purchase a call with a strike price of $63 for $8. You could purchase a put with a strike price of $63 for $3. Calculate the intrinsic value of the call option. Intrinsic value
A call option has a strike of $10. The stock currently trades at $30. The stock can have two possible values at maturity, $70 with 30% probability and $10 with 70% probability. What is the price of a call option on this stock? what will be the price of a put option?
A six-month European call option on a non-dividend-paying stock is currently selling for $6. The stock price is$64, the strike price is S60. The risk-free interest rate is 12% per annum for all maturities. what opportunities are there for an arbitrageur? (2 points) 1. a. What should be the minimum price of the call option? Does an arbitrage opportunity exist? b. How would you form an arbitrage? What is the arbitrage profit at Time 0? Complete the following table. c....