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....
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-$2.
$-1
$1
$0
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