You buy a put with a strike price of $40. Current price is $37.82, has a...

You buy a put with a strike price of $40. Current price is $37.82, has a u of 1.21 and a d of .82. The risk free rate is 1% per period. Use a time period binomial model. if price goes down, what is your holding period return?

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The price of a stock is $40. The price of a one-year put with strike price...

The price of a stock is $40. The price of a one-year put with strike price $30 is $0.70 and a call with the same time to maturity and a strike of $50 costs $0.50. Both options are European. (a) An investor buys one share, shorts one call and buys one put. Draw and comment upon the payoff of this portfolio at maturity as a function of the underlying price. (b) How would your answer to (a) change if the...

You want to buy an American Put on Apple (AAPL) with a strike price of $280....

You want to buy an American Put on Apple (AAPL) with a strike price of $280. Apple is currently trading for $282.12, has a u of 1.14, and a d of 0.88. The risk free rate is 1% per period. Use a two period binomial model. What is the most you should pay for that put?

You want to buy an American Put on Apple (AAPL) with a strike price of $290....

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You buy one call and one put with a strike price of $60 for both. The call...

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Suppose that you buy 4 put options with strike price $50 at $5 each, and sell...

Suppose that you buy 4 put options with strike price $50 at $5 each, and sell 5 call options with strike price $31 at $2.5 each. a) What is your profit if the stock price at maturity is $41? b)What is your profit if the stock price at maturity is $52? c) What is your profit if the stock price at maturity is $30?

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The price of a European put that expires in six months and has a strike price of $100 is $3.59. The underlying stock price is $102, and a dividend of $1.50 is expected in four months. The term structure is flat, with all risk-free interest rates being 8% (cont. comp.). What is the price of a European call option on the same stock that expires in six months and has a strike price of $100? [1 marks] Explain in detail...

1. Bluefish has a put option that trades with a strike price of $74. The put...

1. Bluefish has a put option that trades with a strike price of $74. The put option premium is $12. Determine the profit/loss on WRITING one Bluefish put option if at the option's expiration the stock price is $50. 2. Kingfish has call options trading with a strike price of $77 and a premium of $10. Determine the profit/loss to the buyer of the call option if at the time of expiration the stock price is $63.

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