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In: Finance
You write one IBM July 131 call contract for a premium of $7. You hold the...
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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 |
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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
jeff jeffy answered 1 year agoRelated Solutions
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.
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 purchased a call option on IBM stock 3 months ago for a price (premium) of $1.
You purchased a call option on IBM stock 3 months ago for a
price (premium) of $1. The option has a 6-month expiration and a
strike price of $146. You decided to exercise the option today when
IBM stock is trading at $147. This means that _________________You sold an IBM stock today for $1.You bought an IBM stock today for $146.You bought an IBM stock today for $147.You sold an IBM stock today for $146.
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 hold one share of IBM stock. The current stock price is $56. You are worried...
You hold one share of IBM stock. The current stock price is $56.
You are worried that the stock price may decline. Your objective is
to get at least $50 from the stock at the end of one year. Assume
the volatility of IBM stock (sigma) is 30% and the risk-free rate
is 8%. (i) How will you hedge using put option on IBM stock to make
sure that you receive at least $50 at the end of the year?...
Suppose you purchase one WM May strike=102 call contract at $5 and write one WM May...
Suppose you purchase one WM May strike=102 call contract at $5
and write one WM May strike=107 call at $2. If the price of WM
stock is $105 at expiration, your profit would be _____.
A.
$4.
B.
$400.
C.
zero.
D.
$2.
Consider the following options portfolio. You write a January expiration call option on IBM with exercise...
Consider the following options portfolio. You write a January
expiration call option on IBM with exercise price 130 and premium
of $2.18. You write a January IBM put option with exercise price
125 and premium of $2.44.
Graph the payoff of this portfolio at option expiration as a
function of IBM’s stock price at that time.
What will be the profit/loss on this position if IBM is selling
at 128 on the option expiration date? What if IBM is selling...
Consider the following option portfolio: You write a January 2012 expiration call option on IBM with...
Consider the following option portfolio: You write a January
2012 expiration call option on IBM with exercise price $172, and
the price of the call option is $8.93. You also write a January
expiration IBM put option with exercise price $167, the price of
the put option is $10.85.
Instructions: for parts a, b, and c, enter your answer
as a decimal rounded to the nearest cent.
a. What will be the profit/loss on this
position if IBM is selling...
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 $
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