Homework Answers
Call will be exercised when price on expiry is higher than strike price
Put will be exercised when price on expiry is lower than strike price
now strike price for call and put = 50 and price on expiry = 45
So as explained above, put will be exercised but call will not be exercised
Payoff on call option = 0 [ as it is not exercised]
Payoff on put option = strike price - price on expiry = 50-45 = 5
profit/loss = Total payoff - premium paid = (0 + 5) - 11 = -6
so there is a loss of 6
Answer : loss of $6 [Thumbs up please]
Add Answer to:
7- On January 11, I purchased a call and a put on Exxon with exercise price...
6- On January 11, I purchased a call option on Exxon at a premium of $14.5,...
6- On January 11, I purchased a call option on Exxon at a premium of $14.5, exercise price of $50 and March 15, maturity. On January 21,I decide to close my position by buying a put option on Exxon at a premium of $8.5, exercise price of $50 and March 15, maturity. Is my original position closed? Comment critically. PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
11- Today, I bought I put contract on GM with one-year to maturity with an exercise...
11- Today, I bought I put contract on GM with one-year to maturity with an exercise price of $60 at a premium of $7 when GM stock price was $55. Three month later, GM stock price closed at $52 while the option premium was $12 at which time I closed my position by exercising my put option. Compute my gain/loss. PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
9- Today, I bought I call contract on GM with one-year to maturity with an exercise...
9- Today, I bought I call contract on GM with one-year to maturity with an exercise price of $50 at a premium of $5 when GM stock price was $50. Two month later, GM stock price closed at $62 while the option premium was $15 at which time I closed my position by exercising my call option. Compute my gain/loss. PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
10- Today, I bought I put contract on GM with one-year to maturity with an exercise...
10- Today, I bought I put contract on GM with one-year to maturity with an exercise price of $60 at a premium of $7 when GM stock price was $55. Three month later, GM stock price closed at $52 while the option premium was $12 at which time I closed my position by selling my put option. Compute my gain/loss. PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
12- Today, I bought 1 call contract on GM with one-year to maturity with an exercise...
12- Today, I bought 1 call contract on GM with one-year to maturity with an exercise price of $50 at a premium of $5 when GM stock price was $50. Two month later, GM stock price closed at $62 while the option premium was $15 at which time I closed my position by selling my call option. Compute my gain/loss. PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
13- Today, I bought 1 put contract on GM with one-year to maturity with an exercise...
13- Today, I bought 1 put contract on GM with one-year to maturity with an exercise price of $60 at a premium of $7 when GM stock price was $55. At what stock price will I break-even at the maturity date ignoring transactions costs? PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
14- Today, I bought 1 call contract on GM with one-year to maturity with an exercise...
14- Today, I bought 1 call contract on GM with one-year to maturity with an exercise price of $50 at a premium of $5 when GM stock price was $50. At what stock price will I break-even at the maturity date ignoring transactions costs? PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
ca call and a put that are equally out of the money call. All of the...
ca call and a put that are equally out of the money call. All of the options in this Stock closed recently at $55 per share. The put 2 In options, a 'seagull position is where one writes a call and the money and at the same time one buts an at the mo position have the same date of expiration. Dator Stock cloe following are the most recent closing prices of July options Exercise price call $10.00 $7.15 $4.00...
4- Consider two call options on the same underlying stock and same expiration date. You buy...
4- Consider two call options on the same underlying stock and same expiration date. You buy the call with X=40, and sell the call with X=50. What is the payoff from your position if the stock prices ends at $32? What is the highest payoff from this position? What is the lowest payoff from this position? When would you engage in such a position? PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put...
Consider three call options on the same underlying stock and same expiration date. You buy the...
Consider three call options on the same underlying stock and same expiration date. You buy the call with X=40, buy the call with X=30, and sell two calls with X=35. What is the payoff from your position if the stock prices ends at $32? What is the highest payoff from this position? What is the lowest payoff from this position? For you to engage in such a position, what are your expectations about the stock price? PS: In all questions...
6- On January 11, I purchased a call option on Exxon at a premium of $14.5, exercise price of $50 and March 15, maturity. On January 21,I decide to close my position by buying a put option on Exxon at a premium of $8.5, exercise price of $50 and March 15, maturity. Is my original position closed? Comment critically. PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
11- Today, I bought I put contract on GM with one-year to maturity with an exercise price of $60 at a premium of $7 when GM stock price was $55. Three month later, GM stock price closed at $52 while the option premium was $12 at which time I closed my position by exercising my put option. Compute my gain/loss. PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
9- Today, I bought I call contract on GM with one-year to maturity with an exercise price of $50 at a premium of $5 when GM stock price was $50. Two month later, GM stock price closed at $62 while the option premium was $15 at which time I closed my position by exercising my call option. Compute my gain/loss. PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
10- Today, I bought I put contract on GM with one-year to maturity with an exercise price of $60 at a premium of $7 when GM stock price was $55. Three month later, GM stock price closed at $52 while the option premium was $12 at which time I closed my position by selling my put option. Compute my gain/loss. PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
12- Today, I bought 1 call contract on GM with one-year to maturity with an exercise price of $50 at a premium of $5 when GM stock price was $50. Two month later, GM stock price closed at $62 while the option premium was $15 at which time I closed my position by selling my call option. Compute my gain/loss. PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
13- Today, I bought 1 put contract on GM with one-year to maturity with an exercise price of $60 at a premium of $7 when GM stock price was $55. At what stock price will I break-even at the maturity date ignoring transactions costs? PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
14- Today, I bought 1 call contract on GM with one-year to maturity with an exercise price of $50 at a premium of $5 when GM stock price was $50. At what stock price will I break-even at the maturity date ignoring transactions costs? PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put premium, and S=stock price.
ca call and a put that are equally out of the money call. All of the options in this Stock closed recently at $55 per share. The put 2 In options, a 'seagull position is where one writes a call and the money and at the same time one buts an at the mo position have the same date of expiration. Dator Stock cloe following are the most recent closing prices of July options Exercise price call $10.00 $7.15 $4.00...
4- Consider two call options on the same underlying stock and same expiration date. You buy the call with X=40, and sell the call with X=50. What is the payoff from your position if the stock prices ends at $32? What is the highest payoff from this position? What is the lowest payoff from this position? When would you engage in such a position? PS: In all questions above X denotes the exercise price of the options, C=call premium, P=put...
Consider three call options on the same underlying stock and same expiration date. You buy the call with X=40, buy the call with X=30, and sell two calls with X=35. What is the payoff from your position if the stock prices ends at $32? What is the highest payoff from this position? What is the lowest payoff from this position? For you to engage in such a position, what are your expectations about the stock price? PS: In all questions...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago