a. You have just purchased the options listed below. Based on the information given, indicate whether...

a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. (Enter “0” if there is no profit or return from not exercising the option. Round your answer to 2 decimal places.)

Company	Option	Strike	Today's Stock Price	Moneyness of the option?	Premium	Exercise?	Payoff (per Share)	Profit (per Share)	Return
ABC	Call	49	$51.06	(Click to select)In the moneyOut of the money	4.55	(Click to select)NoYes			%
ABC	Put	49	$51.06	(Click to select)Out of the moneyIn the money	1.61	(Click to select)NoYes			%
ABC	Call	25	$21.96	(Click to select)In the moneyOut of the money	0.76	(Click to select)YesNo			%
ABC	Put	25	$21.96	(Click to select)In the moneyOut of the money	4.87	(Click to select)YesNo			%

b. Now suppose that time has passed and the stocks’ prices have changed as indicated in the table below. Recalculate your answers to part a.

Company	Option	Strike	Today's Stock Price	Moneyness of the option?	Premium	Exercise?	Payoff (per Share)	Profit (per Share)	Return
ABC	Call	18	$19.86	(Click to select)In the moneyOut of the money	4.75	(Click to select)YesNo			%
ABC	Put	18	$19.86	(Click to select)Out of the moneyIn the money	1.82	(Click to select)NoYes			%
ABC	Call	20	$23.11	(Click to select)In the moneyOut of the money	4.08	(Click to select)YesNo			%
ABC	Put	20	$23.11	(Click to select)Out of the moneyIn the money	1.62	(Click to select)NoYes			%

Expert Solution

jeff jeffy answered 6 months ago

a. You have just purchased the options listed below. Based on the information given, indicate whether...

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a. You have just purchased the options listed below. Based on the information given, indicate whether...

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