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...
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
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in three months, what will be the payoff of the call? What
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You own one call option and one put option on Shell, both with a strike price...
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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
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marks]
(b) Check whether the...
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
share.
(a) In your own words, describe the
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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
compounded risk-free rate (all maturities) is 8%. What is the price
of a three-month European call option on the same stock with a
strike price of $60?
Select one:
a. $5.19
b. $1.81
c. $2.79
d. $3.19
2.For the above question, if the...
You purchase 15 put option contracts on ABC stock. The strike price is $22, and the...
You purchase 15 put option contracts on ABC stock. The strike
price is $22, and the premium is $0.5. The contract size is 100
shares.
1. If the stock is selling for $20 per share at expiration, what
are your put options worth?
2. What is your net profit?
3. What if the stock were selling for $21? $22?
need full steps, thx!!!
A put option on an IBM stock has a strike price of $125. The holder of...
A put option on an IBM stock has a strike price of $125. The
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A put option on a stock expires in 7 months with a strike price of 150....
A put option on a stock expires in 7 months with a strike price
of 150. The interest rate is 5 percent and the standard deviation
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A call option on a stock with a strike price of $60 costs $8. A put...
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