Question
In: Finance
INTC current stock price is 23. You sold a 22 put and bought a 21 put....
INTC current stock price is 23. You sold a 22 put and bought a 21 put. The premium on the 22
put is 0.6, and the premium on the 21 put is 0.3. Analyze your gain or loss if on the expiration
day the stock price is larger than 22, between 21 and 22, less than 21.
Solutions
Expert Solution
1. Larger than 22: overall loss of 0.3
2. Between 21 & 22:
Maximum gain can be 0.7 and maximum loss can be 0.3
3. Less than 21: overall gain 0.7
Just for knowledge:
Note: you can get the answer directly from 2. (No need to do 1
&3- to get answers)
jeff jeffy answered 2 weeks agoRelated Solutions
INTC current stock price is 23. You sold a 22 put and bought a 21 put....
INTC current stock price is 23. You sold a 22 put and bought a
21 put. The premium on the 22 put is 0.6, and the premium on the 21
put is 0.3. Analyze your gain or loss if on the expiration day the
stock price is larger than 22, between 21 and 22, less than 2
You purchase 15 put option contracts on ABC stock. The strike price is $22, and the...
You purchase 15 put option contracts on ABC stock. The strike
price is $22, and the premium is $0.5. The contract size is 100
shares.
1. If the stock is selling for $20 per share at expiration, what
are your put options worth?
2. What is your net profit?
3. What if the stock were selling for $21? $22?
need full steps, thx!!!
1.The current price of a stock is $21. In 1 year, the price will be either...
1.The current price of a stock is $21. In 1 year, the price will
be either $27 or $15. The annual risk-free rate is 6%. Find the
price of a call option on the stock that has a strike price is of
$23 and that expires in 1 year. (Hint: Use daily
compounding.) Round your answer to the nearest cent. Assume 365-day
year. Do not round your intermediate calculations.
2.The current price of a stock is $15. In 6 months,...
You wrote(sold short) 1 put option when the put option price was $2, the underlying stock...
You wrote(sold short) 1 put option when the put option price was
$2, the underlying stock price was $50, and the delta of the put
option was -0.65. To achieve delta neutrality, you shorted some
shares of the underlying stock. Please fill in the blanks in the
following table.
Please show calculations.
Week
Stock price
Put option price per share
Delta
Number of additional shares shorted
Proceeds from short selling additional shares
0
50.00
2
-0.65
1
48.12
3.6
-0.80...
The current price of a stock is $22, and at the end of one year its...
The current price of a stock is $22, and at the end of one year
its price will be either $29 or $15. The annual risk-free rate is
5.0%, based on daily compounding. A 1-year call option on the
stock, with an exercise price of $21, is available. Based on the
binominal model, what is the option's value?
21. The current stock price of firm AAa= $20. It is expected that this firm’s stock...
21. The current stock price of firm AAa= $20. It is expected
that this firm’s stock price will go up by 20%, or it might go down
by 20%. No dividends. The one year risk free rate = 5%. A call
option’s strike price is also $20. Using the binomial pricing model
, calculate that to set up a risk free portfolio, for each call
option, how many stocks (or portion of a stock) is needed.
22. Using the binomial...
1- 25 28 24 21 28 26 23 22 29 21 29 24 22 25 26...
1-
25
28
24
21
28
26
23
22
29
21
29
24
22
25
26
18
27
26
29
23
21
26
27
21
25
27
24
29
22
25
24
24
21
29
22
25
21
22
22
25
22
25
Calculate a) arithmetic mean and b) standard deviation of the
sample.
A)
b)
- Represent a classified frequency table. Answer the following
questions in this table with column calculations.
Calculate a) arithmetic mean, b) quadratic mean, c)...
Calculate the European put price using the BSMOPM. The current stock price is 50 and the...
Calculate the European put price using the BSMOPM. The current
stock price is 50 and the exercise price is 55. The continuously
compounded risk-free rate is 5%. The option expires in 25 days and
volatility is 75%.
Round to 4 decimals – You must solve this by hand
clearly show the answer for each part
The current price of a stock is $40. The price of a one-year European put option...
The current price of a stock is $40. The price of a one-year
European put option on the stock with a strike price of $30 is
quoted at $2 and the price of a one-year European call option on
the stock with a strike price of $50 is quoted at $3.
(2 points) Investor D wants to own the shares but wants to
reduce his initial investment cost. So he buys the stock and shorts
the call option on 100...
A 2-year American put is written on a stock whose current price is $42. You expect...
A 2-year American put is written on a stock whose current price
is $42. You expect that in each year the stock price either goes up
by 15% or decreases by 5%. The one-period interest rate is 5%. The
option’s exercise price is $45. Will you ever exercise the option
early?
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