4)
value of the American option will be
=114-100
=14
the above is answer..
we do only one question based on HOMEWORKLIB POLICY
covered call writer break even at (4) The current price of an asset is $100, An...
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...
The current market price of a share of Disney stock is $30. If a call option on this stock has a strike price of $35, the call is out of the money. is in the money. can be exercised profitably. is out of the money and can be exercised profitably. is in the money and can be exercised profitably. The maximum loss for a writer of a put option on a stock is unlimited. equal to the exercise price. equal...
A trader creates a long strangle with put options with a strike price of $160 per share, and call options with a strike price of $170 per share by trading a total of 20 option contracts (10 put contracts and 10 call contracts). Each contract is written on 100 shares of stock. The put option is worth $18 per share, and the call option is worth $15 per share. What is the value (payoff) of the strangle at maturity as...
A trader creates a long strangle with put options with a strike price of $160 per share, and call options with a strike price of $170 per share by trading a total of 20 option contracts (10 put contracts and 10 call contracts). Each contract is written on 100 shares of stock. The put option is worth $18 per share, and the call option is worth $15 per share. What is the value (payoff) of the strangle at maturity as...
5. A call option on Company B common stock is worth $8 with 7 months before expiration. The strike price on the call is $40 and the price per share is currently trading at $44 per share. The put option at the same exercise price is worth $1.50. a. Is the call option in or out or the money? b. Is the put option in or out of the money? c. At what extra above expiration value is the call...
1) A call option is priced at $7 with an exercise price of $100 and an underlying stock price of $98. If the stock price at expiry is $102 determine the following: o Option value for a long position o Profit for a long position 2) A put option is priced at $4 with an exercise price of $60 and an underlying price of $62. Determine the following: o Option value for a long position if the stock price at...
The current stock price of RWJ is $312.32. You have the following quotes on RWJ options: Expiration Exercise Price Calls Puts Dec 305 27.40 8.25 Jan 310 18.43 14.15 Feb 315 19.55 20.00 May 320 25.55 30.40 a. Which of the options are in the money? b. What is the exercise value of a February call option with a strike price of $315? c. Suppose you buy 10 contracts of the February 315 call option. How much will you pay,...
(i) The current stock price is 100. The call option premium with a strike price 100 is 8. The effective risk-free interest rate is 2%. The stock pays no dividend. What is the price of a put option with strike price 100? (Both options mature in 3 months.) (ii) The 3-month forward price is 50. The put option premium with a strike price 52 is 3 and the put option matures in 3 months. The risk-free interest rate is 4%...
An American call option gives the writer the _________ to _________ the underlying asset at the exercise price on or before the expiration date. Multiple Choice obligation, sell obligation, buy right, buy right, sell
2. The market price of a 100-share European call option contract is $560. The expiration date of the call option is one year from today. On that date, the price of the underlying stock will be either $50 or $32. The two states are equally likely to occur. Currently, the stock sells for $40; its strike price is $41, Suppose you are able to borrow money at 10 percent per annum. Is there an arbitrage chance? How can you make...