Question
In: Finance
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?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
. 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...
A call option has an exercise price of $30. The stock price is
currently $27 and the appropriate interest rate is 6%. The option
expires in exactly one year and the sigma (The return variability
of underlying asset expressed as a decimal) is 0.50 or 50%.
At expiration the stock underlying the option is selling for
$34.00. What do you do? What is your loss or gain?
Group of answer choices
A. Let the option expire unexercised since the $4.00...
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...
1. A call option priced at $6 with a stock price of $45
and an exercise price of $46 allows the holder to buy the stock
at
$46
$45
$52
$51
$40
2.A put option has a strike price of $75 and the cost of
the option is $6. If the current price of the stock is $73 then the
breakeven price for the option is:
$69
$75
$67
$81
$79
3. A call option has a strike price of...
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...
You have written a call option on Walmart common stock. The option has an exercise price...
You have written a call option on Walmart common stock. The
option has an exercise price of $88, and Walmart’s stock currently
trades at $86. The option premium is $1.30 per contract. a. How
much of the option premium is due to intrinsic value versus time
value? b. What is your net profit if Walmart’s stock price
decreases to $84 and stays there until the option expires? c. What
is your net profit on the option if Walmart’s stock price...
You have written a call option on Walmart common stock. The option has an exercise price...
You have written a call option on Walmart common stock. The
option has an exercise price of $77, and Walmart’s stock currently
trades at $75. The option premium is $1.40 per contract.
a. How much of the option premium is due to
intrinsic value versus time value?
b. What is your net profit if Walmart’s stock
price decreases to $73 and stays there until the option
expires?
c. What is your net profit on the option if
Walmart’s stock price...
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