Question

In: Finance

Fill in with the correct symbolsa. The algebraic value of long Q shares of stock...

Fill in with the correct symbols

a. The algebraic value of long Q shares of stock is W = _____X.

b. At expiration the value of an October 60 Call with stock price of X is Max( _________, 0).

c. At expiration the value of an October 70 Put with stock price of 65 is ____________per share quoted price.

d. The algebraic value of long 100 shares of stock at price X and long one put of value P is W = ______________

e. At expiration if the price of the stock is 60 and the value of a call option is $7 per share quoted price then the value of the covered write is ____________per share quoted price.

Solutions

Expert Solution

a). The algebraic value of long Q shares of stock is W = QX.

b). At expiration the value of an October 60 Call with stock price of X is
Max(St-60, 0).

c). At expiration the value of an October 70 Put with stock price of 65 is
5 per share
quoted price.

d). The algebraic value of long 100 shares of stock at price X and long one
put of value P is W = 100*X+P

e). At expiration if the price of the stock is 60 and the value of a call option is $7 per share quoted price then the value of the covered write is $53 per share quoted price.


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