Question

In: Finance

Based on your analysis, you estimate Wavemobile's stock price is going to increase from its current...

Based on your analysis, you estimate Wavemobile's stock price is going to increase from its current level of $18 sometime during the next three months. You can buy a 3-month call option giving you the right to buy 1 share at a price of $32 per share. If Wavemobile's stock price increases to $59, what would the exercise value be?

Solutions

Expert Solution

what would the exercise value be

=stock price-strike value

=59-32

=27

the above will be answer

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Suppose you believe that Johnson Company's stock price is going to increase from its current level...
Suppose you believe that Johnson Company's stock price is going to increase from its current level of $40 sometime during the next 5 months. For $400 you can buy a 5-month call option giving you the right to buy 100 shares at a price of $60 per share. If you buy this option for $500 and Johnson's stock price actually rises to $70, would you exercise your call option? AND what would be your pre-tax net profit or loss from...
Suppose you believe that Du Pont's stock price is going to decline from its current level...
Suppose you believe that Du Pont's stock price is going to decline from its current level of $ 84.57 sometime during the next 5 months. For $ 462.82 you could buy a 5-month put option giving you the right to sell 100 shares at a price of $ 78 per share. If you bought a 100-share contract for $ 462.82 and Du Pont's stock price actually changed to $ 87.64 at the end of five months, your net profit (or...
Suppose you believe that Bennett Environmental's stock price is going to increase from its current level of $ 36.47 sometime during the next 7 months.
Suppose you believe that Bennett Environmental's stock price is going to increase from its current level of $ 36.47 sometime during the next 7 months. For $ 235.32 you could buy a 7-month call option giving you the right to buy 100 shares at a price of $ 27 per share. If you bought a 100-share contract for $ 235.32 and Bennett's stock price actually changed to $ 29.03 , your net profit (or loss) after exercising the option would...
72 ) MGT 2100 - Final Review- You are expecting the current stock price to increase...
72 ) MGT 2100 - Final Review- You are expecting the current stock price to increase in the near future. The stock currently trades for $23 per SH. A call option with a price (strike price) of $25 can be purchased for $4.60 per share at this particular time. You have $4,600 to invest. a) What are your two alternative investment strategies for the $4,600 (one in the stock and the other in call options)? Assume all of this money...
Select a company and determine its current stock price. Compare the current price to its recent...
Select a company and determine its current stock price. Compare the current price to its recent activity and to at least one other similar company in the same industry or line of business. Discuss possible reasons for increases or decreases in your stock's price and its standing with its competitor.
Based on your analysis of the current marketing situation and observation of their current marketing campaigns,...
Based on your analysis of the current marketing situation and observation of their current marketing campaigns, where are the new opportunities for Macy's to effectively market? Detail the competitive issues that may be faced and how these challenges will impact these opportunities. Does the internal situation in the company support these opportunities? If not, what are the investments that will have to be made?
Based on your analysis of the current marketing situation and observation of their current marketing campaigns,...
Based on your analysis of the current marketing situation and observation of their current marketing campaigns, where are the new opportunities for Macy's to effectively market? Detail the competitive issues that may be faced and how these challenges will impact these opportunities. Does the internal situation in the company support these opportunities? If not, what are the investments that will have to be made?
You think that a stock price is going to swing into a certain range. Hence, in...
You think that a stock price is going to swing into a certain range. Hence, in order to limit your risk (and your return as well), you decide to buy one put for $7 with exercise price of 110; buy one put for $1 with exercise price of 95; sell one put for $4 with exercise price of 105; and sell one put for $2 with exercise price of $100. (a) What is your maximum profit and maximum loss of...
You think that a stock price is going to swing into a certain range. Hence, in...
You think that a stock price is going to swing into a certain range. Hence, in order to limit your risk (and your return as well), you decide to buy one put for $7 with exercise price of 110; buy one put for $1 with exercise price of 95; sell one put for $4 with exercise price of 105; and sell one put for $2 with exercise price of $100. (a) What is your maximum profit and maximum loss of...
The current price of a non-dividend-paying stock is $32.59 and you expect the stock price to...
The current price of a non-dividend-paying stock is $32.59 and you expect the stock price to either go up by a factor of 1.397 or down by a factor of 0.716 over the next 0.7 years. A European put option on the stock has a strike price of $33 and expires in 0.7 years. The risk-free rate is 3% (annual, continuously compounded). Part 1. What is the option payoff if the stock price goes down? Part 2. What is the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT