A speculator buys a call option for $1.5, with an exercise price of $20. The stock...

A speculator buys a call option for $1.5, with an exercise price of $20. The stock is currently priced at $19, and rises to $26 on the expiration date. The speculator will exercise the option on the expiration date (if it is feasible to do so). What is the speculator's profit per unit?

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jeff jeffy answered 2 years ago

Suppose an investor buys a call option on 45,000 barrels of oil with an exercise price...

Suppose an investor buys a call option on 45,000 barrels of oil with an exercise price of $51 per barrel and simultaneously sells a put option on 45,000 barrels of oil with the same exercise price of $51 per barrel. Her net payoff per barrel on these option contracts is _____ if the market price per barrel is $49 and _____ if the price per barrel is $55.

. A stock sells for $110. A call option on the stock has an exercise price...

. A stock sells for $110. A call option on the stock has an exercise price of $105 and expires in 43 days. If the interest rate is 0.11 and the standard deviation of the stock’s return is 0.25. a) Calculate the call using the Black-Scholes model b) What would be the price of a put with an exercise price of $140 and the same time until expiration? c) How does an increase in the volatility and interest rate changes...

A speculator purchases a put option for a premium of $2.75, with an exercise price of...

A speculator purchases a put option for a premium of $2.75, with an exercise price of $70. The stock is presently priced at $69, and rises to $82 before the expiration date. What is the stock price at which the speculator would break even?

A stock sells for $110. A call option on the stock has exercise price of $105...

A stock sells for $110. A call option on the stock has exercise price of $105 and expires in 43 days. Assume that the interest rate is 0.11 and the standard deviation of the stock’s return is 0.25. What is the call price according to the black-Scholes model?

A stock sells for $110.A call option on the stock has an exercise price of $105...

A stock sells for $110.A call option on the stock has an exercise price of $105 and expires in 43 days.Assume that the interest rate is 0.11 and the standard deviation of the stock's return is 0.25 Required: What is the call price according to the Black Scholes model?

A call option has an exercise price of $30. The stock price is currently $27 and...

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A call option has an exercise price of $40. The stock price is currently $36 and...

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A stock is currently trading at $20. The call option at $20 strike price for September...

A stock is currently trading at $20. The call option at $20 strike price for September 2020 costs $1 per share while the September put at $20 strike price costs $.50 per share. a) What’s a straddle strategy for this stock; b) Explain the risk and reward as stock price goes up to more than $22 ; c) Explain the risk and reward as stock price trades below $21.

1. A call option priced at $6 with a stock price of $45 and an exercise...

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Lavender Berhad’s stock is currently selling at RM30. The call stock option with an exercise price...

Lavender Berhad’s stock is currently selling at RM30. The call stock option with an exercise price of RM25 has 180 days to expiration. The annual risk-free interest rate is 8%. The variance has been estimated to be 40% per annum. Assume: 365 days in a year From the above information you are required to answer the questions below: determine the value of this call option based on Black-Scholes model. determine the corresponding value of put option. =When you...

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