Question
In: Finance
ou own a call option on Intuit stock with a strike price of $4040. When you...
ou own a call option on Intuit stock with a strike price of
$4040.
When you purchased the option, it cost
$66.
The option will expire in exactly three months' time.
a. If the stock is trading at
$5555
in three months, what will be the payoff of the call? What will be the profit of the call?
b. If the stock is trading at
$3434
in three months, what will be the payoff of the call? What will be the profit of the call?
c. Draw a payoff diagram showing the value of the call at expiration as a function of the stock price at expiration.
d. Redo c, but instead of showing payoffs, show profits.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
You shorted a call option on Intuit stock with a strike price of $3939. When you...
You shorted a call option on Intuit stock with a strike price
of
$3939.
When you sold (wrote) the option, you received
$77.
The option will expire in exactly three months' time.
a. If the stock is trading at
$5656
in three months, what will your payoff be? What will your
profit be?
b. If the stock is trading at
$3333
in three months, what will your payoff be? What will your
profit be?
c. Draw a payoff diagram showing...
Problem 13-2 You own a call option on Intuit stock with a strike price of $35....
Problem 13-2 You own a call option on Intuit stock with a strike
price of $35. When you purchased the option, it cost $3. The
option will expire in exactly three months' time. a. If the stock
is trading at $42 in three months, what will be the payoff of
the call? What will be the profit of the call? b. If the stock is
trading at $25 in three months, what will be the payoff of the
call? What...
You own a put option on Ford stock with a strike price of $99. When you...
You own a put option on Ford stock with a strike price of
$99.
When you bought the put, its cost to you was
$33.
The option will expire in exactly six months' time.
a. If the stock is trading at
$22
in six months, what will be the payoff of the put? What will
be the profit of the put?
b. If the stock is trading at
$2020
in six months, what will be the payoff of the put?...
Consider a call option on a stock, the stock price is $23, the strike price is...
Consider a call option on a stock, the stock price is $23, the
strike price is $20, the continuously risk-free interest rate is 9%
per annum, the volatility is 39% per annum and the time to maturity
is 0.5.
(i) What is the price of the option? (6 points).
(ii) What is the price of the option if it is a put? (6
points)
(iii) What is the price of the call option if a dividend of $2
is expected...
You purchased a call option for an Apple stock with the strike price of $110. The...
You purchased a call option for an Apple stock with the strike
price of $110. The option premium was $1. You held the option until
maturity, when the price for each share of Apple was $111. Your
payoff at maturity was_____.
-$2.
$-1
$1
$0
You own one call option and one put option on Shell, both with a strike price...
You own one call option and one put option on Shell, both with a
strike price of 80. The interest rate is 5% and the time to
expiration is nine months. The standard deviation of Shell is 25
percent. Graph on the same graph the value of the call and the put
as the price of Shell goes from 70 to 130. (So that is two lines on
the same graph.) Note:at least 50 data points on the graphs
URGENT ! Consider a call option on a stock, the stock price is $29, the strike...
URGENT !
Consider a call option on a stock, the stock price is $29, the
strike price is $30, the continuously risk-free interest rate is 5%
per annum, the volatility is 20% per annum and the time to maturity
is 0.25.
(i) What is the price of the option? (6 points)
(ii) What is the price of the option if it is a put? (6
points)
(iii) What is the price of the call option if a dividend of $2...
The stock price of Lotus is currently $220 and the call option with strike price of...
The stock price of Lotus is currently $220 and the call option
with strike price of $220 is $10. A trader purchases 100 shares of
Lotus stock and short 1 contract of call options with strike price
of $220. As a financial analyst at Citibank, you want to answers
the following two questions: a. What is the maximum potential loss
for the trader? b. When the stock price is $240 and the call is
exercised, what is the trader’s net...
Suppose you have a call option on a stock with a strike price of $2 2....
Suppose you have a call option on a stock with a strike price of
$2 2. A) Fill in the stock price and strike price in the table and
calculate the exercise value ( B) Plot the Stock price on the
x-axis and the Exercise value on the y-axis. Be sure to label both
axes with titles and include a chart title. Now assume you have the
following data for a call option: Current stock price Strike price
Time to...
a) A call option with a strike price of $68 on a stock selling at $82...
a) A call option with a strike price of $68 on a stock selling
at $82 costs $15.3. What are the call option’s intrinsic and time
values?
b) A put option on a stock with a current price of $37 has an
exercise price of $39. The price of the corresponding call option
is $2.85. According to put-call parity, if the effective annual
risk-free rate of interest is 4% and there are three months until
expiration, what should be the...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and...
- An investment project costs $20,100 and has annual cash flows of $4,400 for six years. ...
- PUT IN JAVA PROGRAMMING The StockB class: Design a class named StockB that contains the following...
- Draw a DFA for the following ( ∑ = {0,1}): Set of all strings with.
- In the article from Forbes notes that the goal of a leader is not to clone...
- Many people keep time using a 24 hour clock (11 is 11am and 23 is 11pm,...
- UNIX ONLY -- DIFFICULT LAB ASSIGNMENT This is an extremely difficult subject for me. Could you...
ADVERTISEMENT