Question
In: Finance
You write one MBI July 135 call contract (equaling 100 shares) for a premium of $15....
You write one MBI July 135 call contract (equaling 100 shares) for a premium of $15. You hold the option until the expiration date, when MBI stock sells for $142 per share. You will realize a ________ on the investment.
Solutions
jeff jeffy answered 1 year agoRelated Solutions
You purchase one MBI July 134 call contract (equaling 100 shares) for a premium of $15....
You purchase one MBI July 134 call contract (equaling 100
shares) for a premium of $15. You hold the option until the
expiration date, when MBI stock sells for $141 per share. You will
realize a ________ on the investment. $800 loss $700 loss $800
profit $700 profit
You write one IBM July 131 call contract for a premium of $7. You hold the...
You write one IBM July 131 call contract for a premium of $7.
You hold the option until the expiration date, when IBM stock sells
for $134 per share. You will realize a ______ on the
investment.
A. $400 profit
B. $300 loss
C. $1,000 loss
D. $300 profit
Suppose you purchased two call option contracts (100 shares per contract) with $15 strike price at...
Suppose you purchased two call option contracts (100 shares per
contract) with $15 strike price at a quoted price of $0.08
premium/share. What is your total profit on this investment if the
price is $14.80 on the option expiration date?
A trader has a call option contract to sell 100 shares of a stock for a...
A trader has a call option contract to sell 100 shares of a
stock for a strike price of $50. What is the effect on the terms of
the contract of the following events?
(a) A $5 dividend being paid
(b) A 5-for-4 stock split
(c) A 10% stock dividend being paid.
A trader has a call option contract to sell 100 shares of a stock for a...
A trader has a call option contract to sell 100 shares of a
stock for a strike price of $50. What is the effect on the terms of
the contract of the following events?
(a) A $5 dividend being paid
(b) A 5-for-4 stock split
(c) A 10% stock dividend being paid.
buy one call option on 1 gold contract (100 oz.). Exercise Price = $1400/oz Option Premium...
buy one call option on 1 gold contract (100 oz.).
Exercise Price = $1400/oz
Option Premium = $30/oz
If the price of gold moves to $1350, what is the net option
payoff in $
Suppose the price of Apple’s common shares is $180/share. The call option contract (involves 100 shares)...
Suppose the price of Apple’s common shares is $180/share. The
call option contract
(involves 100 shares) on Apple, with a strike price of $195/share
is $10/contract. With the
$180 you have, you are looking at two choices:
A: Buy one share of Apple’s common stock
B: Buy 18 call option contracts
(1) What are the rates of return on A and B if the share price has
dropped to $170/share?
(2) What are the rates of return on A and...
You wish to write one European Call contract on Zoom (ZM) with a strike price of...
You wish to write one European Call contract on Zoom (ZM) with a
strike price of $160. Zoom's current price is $158.01, has a u of
1.25, and d of 0.79. The risk free rate is 1% per period. Use a two
period binomial model. How many shares of Zoom do you need to
purchase to hedge your price risk when you write the call? Note:
Answer in number of shares, report up to two decimal places.
You wish to write one European Call contract on Zoom (ZM) with a strike price of...
You wish to write one European Call contract on Zoom (ZM) with a
strike price of $180. Zoom's current price is $158.01, has a u of
1.25, and d of 0.79. The risk free rate is 1% per period. Use a two
period binomial model. How many shares of Zoom do you need to
purchase to hedge your price risk when you write the call?
You purchase 18 call option contracts with a strike price of $100 and a premium of...
You purchase 18 call option contracts with a strike price of
$100 and a premium of $2.85. Assume the stock price at expiration
is $112.00.
a. What is your dollar profit? (Do not
round intermediate calculations.)
b. What is your dollar profit if the stock
price is $97.95? (A negative value should be indicated by a
minus sign. Do not round intermediate calculations.)
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