Question
In: Finance
you have purchased 10bcall option contracts on CBA stock with an exercise price of $58.50 when...
you have purchased 10bcall option contracts on CBA stock with an exercise price of $58.50 when the option was quoted at $2.50. the option expires today when the value of CBA stock is at $62.60. what is the net profit or loss on this investment, ignoring all teasing costs and taxes?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
You have purchased a put option on Pfizer common stock. The option has an exercise price...
You have purchased a put option on Pfizer common stock. The
option has an exercise price of $52 and Pfizer’s stock currently
trades at $54. The option premium is $0.70 per contract.
a.
What is your net profit on the option if Pfizer’s stock price
does not change over the life of the option? (Negative
amount should be indicated by a minus sign. Round your answer to 2
decimal places. (e.g., 32.16))
Net profit
$ per share
b.
What is your...
Q5 you have purchased a put option on Pfizer common stock. The option has an exercise...
Q5
you have purchased a put option on Pfizer common stock. The
option has an exercise price of $39 and Pfizer’s stock currently
trades at $41. The option premium is $0.60 per contract.
a. What is your net profit on the option if Pfizer’s stock price
does not change over the life of the option?
b. What is your net profit on the option if Pfizer’s stock price
falls to $35 and you exercise the option?
(For all requirements, negative...
Consider an option on a dividend-paying stock when the stock price is $30, the exercise price...
Consider an option on a dividend-paying stock when the stock
price is $30, the exercise price is $29, the risk-free interest
rate is 5% per annum, the volatility is 25% per annum, and the time
to maturity is four months. The present value of the dividend to be
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option if it is a European call? b. What is the price of the option
if it...
Consider an option on a dividend-paying stock when the stock price is $30, the exercise price...
Consider an option on a dividend-paying stock when the stock
price is $30, the exercise price is $29, the risk-free interest
rate is 5% per annum, the volatility is 25% per annum, and the time
to maturity is four months. The present value of the dividend to be
paid in 3 months is $1. (20 points) a. What is the price of the
option if it is a European call? b. What is the price of the option
if it...
You have written a call option on Walmart common stock. The option has an exercise price...
You have written a call option on Walmart common stock. The
option has an exercise price of $88, and Walmart’s stock currently
trades at $86. The option premium is $1.30 per contract. a. How
much of the option premium is due to intrinsic value versus time
value? b. What is your net profit if Walmart’s stock price
decreases to $84 and stays there until the option expires? c. What
is your net profit on the option if Walmart’s stock price...
You have written a call option on Walmart common stock. The option has an exercise price...
You have written a call option on Walmart common stock. The
option has an exercise price of $77, and Walmart’s stock currently
trades at $75. The option premium is $1.40 per contract.
a. How much of the option premium is due to
intrinsic value versus time value?
b. What is your net profit if Walmart’s stock
price decreases to $73 and stays there until the option
expires?
c. What is your net profit on the option if
Walmart’s stock price...
Consider an option on a non-dividend-paying stock when the stock price is $30, the exercise price...
Consider an option on a non-dividend-paying stock when the stock
price is $30, the exercise price is $29, the risk-free interest
rate is 5% per annum, the volatility is 25% per annum, and the time
to maturity is four months.
1. What is the price of the option if
it is a European call?
2. What is the price of the option if
it is an American call?
Consider an option on a non-dividend-paying stock when the stock price is $30, the exercise price...
Consider an option on a non-dividend-paying stock when the stock
price is $30, the exercise price is $29, the risk-free interest
rate is 5% per annum, the volatility is 25% per annum, and the time
to maturity is four months.
What is the price of the option if it is a European call?
What is the price of the option if it is an American call?
What is the price of the option if it is a European put?
Verify...
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) Consider an option on a non-dividend-paying stock when the stock price is $30, the exercise...
) Consider an option on a non-dividend-paying stock when the
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interest rate is 5% per annum, the volatility is 30% per annum, and
the time to maturity is four months.
(a) What is the price of the option if it is a European
call?
(b) What is the price of the option if it is an American
call?
(c) What is the price of the option if it is...
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