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Chapter 10 - Mechanics of Options Markets 1-Calculate the payoff at expiration for a call option...
2-Calculate the payoff at expiration for a put option on the S&P 100 stock index in...
2-Calculate the payoff at expiration for a put option on the S&P 100 stock index in which the underlying price is 623.22 at expiration, the multiplier is 100, the strike price is a) 475 b) 750
3. (10 pts) For each k e [0, 1,2,..., 301 the symbol S(k) denotes the price of the stock at time k. A European call option with strike 90 and expiration n- 30 costs 15. A European put option with...
3. (10 pts) For each k e [0, 1,2,..., 301 the symbol S(k) denotes the price of the stock at time k. A European call option with strike 90 and expiration n- 30 costs 15. A European put option with strike 100 and expiration 30 costs 11. Both options have the same stock as their underlying security. What is the price of the security whose payoff structure is 7S (30) 630, if S(30) 100, S(30)-30, if 90 S(30) S 100,...
The diagram below represents the payoff of a European call option on the stock with a...
The diagram below represents the payoff of a European call option on the stock with a strike price (K)= $100, initial cost (option premium) =$10, and option life of 6 months. The market price of the underlying stock reaches ($115) at the maturity date of the option, explains in detail whether the holder of this option will exercise his option and achieve profit knowing that the profit is the final payoff minus the initial cost? 30 20 10 0 -10...
Draw the payoff picture at expiration for a long position in a call option that has...
Draw the payoff picture at expiration for a long position in a call option that has a premium of $1.75 and a strike price of $55.
Calculate the payoff at expiration for a put holder on an option on a Eurodollar future,...
Calculate the payoff at expiration for a put holder on an option on a Eurodollar future, where the underlying IMM index value at expiration using the IMM quotation on a 90-day dollar denominated time deposit on a $1,000,000 notional principal is 98.64 and the “exercise price” (also as an IMM index value) is 98.80 $0 $250 $300 $350 $400
4- Consider two call options on the same underlying stock and same expiration date. You buy...
4- Consider two call options on the same underlying stock and same expiration date. You buy the call with X=40, and sell the call with X=50. What is the payoff from your position if the stock prices ends at $32? What is the highest payoff from this position? What is the lowest payoff from this position? When would you engage in such a position? PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put...
Consider three call options on the same underlying stock and same expiration date. You buy the...
Consider three call options on the same underlying stock and same expiration date. You buy the call with X=40, buy the call with X=30, and sell two calls with X=35. What is the payoff from your position if the stock prices ends at $32? What is the highest payoff from this position? What is the lowest payoff from this position? For you to engage in such a position, what are your expectations about the stock price? PS: In all questions...
5.What is the value of a call option if the underlying stock price is $78, the...
5.What is the value of a call option if the underlying stock price is $78, the strike price is $80, the underlying stock volatility is 42 percent, and the risk-free rate is 5.5 percent? Assume the option has 110 days to expiration. 6. Suppose you buy one SPX call option contract with a strike of 1300. At maturity, the S&P 500 Index is at 1321. What is your net gain or loss if the premium you paid was $14?
Suppose that a call option with a strike price of $48 expires in one year and...
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...
4. A call option currently sells for $7.75. It has a strike price of $85 and...
4. A call option currently sells for $7.75. It has a strike price of $85 and seven months to maturity. A put with the same strike and expiration date sells for $6.00. If the risk-free interest rate is 3.2 percent, what is the current stock price? 5. Suppose you buy one SPX call option contract with a strike of 1300. At maturity, the S&P 500 Index is at 1321. What is your net gain or loss if the premium you...
2-Calculate the payoff at expiration for a put option on the S&P 100 stock index in which the underlying price is 623.22 at expiration, the multiplier is 100, the strike price is a) 475 b) 750
3. (10 pts) For each k e [0, 1,2,..., 301 the symbol S(k) denotes the price of the stock at time k. A European call option with strike 90 and expiration n- 30 costs 15. A European put option with strike 100 and expiration 30 costs 11. Both options have the same stock as their underlying security. What is the price of the security whose payoff structure is 7S (30) 630, if S(30) 100, S(30)-30, if 90 S(30) S 100,...
4- Consider two call options on the same underlying stock and same expiration date. You buy the call with X=40, and sell the call with X=50. What is the payoff from your position if the stock prices ends at $32? What is the highest payoff from this position? What is the lowest payoff from this position? When would you engage in such a position? PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put...
Consider three call options on the same underlying stock and same expiration date. You buy the call with X=40, buy the call with X=30, and sell two calls with X=35. What is the payoff from your position if the stock prices ends at $32? What is the highest payoff from this position? What is the lowest payoff from this position? For you to engage in such a position, what are your expectations about the stock price? PS: In all questions...
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