Question
In: Finance
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? What will be the profit of the put?
c. Draw a payoff diagram showing the value of the put 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
ou own a call option on Intuit stock with a strike price of $4040. When you...
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When you purchased the option, it cost
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The option will expire in exactly three months' time.
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A European call option and put option on a stock both have a strike price of...
A European call option and put option on a stock both have a
strike price of $21 and an expiration date in 4 months. The call
sells for $2 and the put sells for $1.5. The risk-free rate is 10%
per annum for all maturities, and the current stock price is $20.
The next dividend is expected in 6 months with the value of $1 per
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(a) In your own words, describe the
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A European call option and put option on a stock both have a strike price of...
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month. Identify the arbitrage opportunity open to a
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1.The price of a three-month European put option on a stock with a strike price of...
1.The price of a three-month European put option on a stock with
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in one month. The current stock price is $58 and the continuously
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strike price of $60?
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2.For the above question, if the...
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2. What is your net profit?
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need full steps, thx!!!
A put option on an IBM stock has a strike price of $125. The holder of...
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