Question
In: Finance
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.
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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.
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Solutions
Expert Solution
Ans a)
| Company | Option | Strike | Today's Stock Price | In/Out of the Money? | Premium | Exercise? | Profit | Return |
| ABC | Call | 10 | $10.26 | Out of the Money | 1.02 | No | $ (1.02) | -100.00% |
| ABC | Put | 10 | $10.26 | In the Money | 0.87 | Yes | $ (0.61) | -70.11% |
| ABC | Call | 25 | $23.93 | In the Money | 0.97 | Yes | $ 0.10 | 10.31% |
| ABC | Put | 25 | $23.93 | Out of the Money | 2.17 | No | $ (2.17) | -100.00% |
Ans b)
| Company | Option | Strike | Today's Stock Price | In/Out of the Money? | Premium | Exercise? | Profit | Return |
| ABC | Call | 10 | $11.23 | Out of the Money | 1.02 | No | $ (1.02) | -100.00% |
| ABC | Put | 10 | $11.23 | In the Money | 0.87 | Yes | $ 0.36 | 41.38% |
| ABC | Call | 25 | $27.00 | Out of the Money | 0.97 | No | $ (0.97) | -100.00% |
| ABC | Put | 25 | $27.00 | In the Money | 2.17 | Yes | $ (0.17) | -7.83% |
jeff jeffy answered 1 year agoRelated Solutions
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
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a. You have just purchased the options listed below. Based on the information given, indicate whether...
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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.)
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Option
Strike
Today's Stock...
a. You have just purchased the options listed below. Based on the information given, indicate whether...
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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.)
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