Homework Answers
a-1. Yes, the strike price is lesser than the stock price which means exercising call would be cheaper than buying in market. However the call premium is $2.62.
a-2. There is net loss of $(102-100)-$2.62 x 100 shares= $62
a-3. The rate of return is -0.62/100= -0.62%
b-1. Yes.
b-2. Net profit= $(102-95)-$6.35= $0.65
b-3. Rate of return= 0.65/95= 0.68%
c-1. No, exercising put at a stock price of 100 will lead to a 0 profit situation.
c-2.There is a premium loss of $1.55 per share. Rate of return is 1.55/100= -1.55%
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refer to the stock options on Apple
O No No Negative value shouid be
Refer to the stock options on Apple in the Figure 2.10: Suppose you buy an June...
Refer to the stock options on Apple in the Figure 2.10: Suppose you buy an June expiration call option on 20 shares with the excise price of $135. a-1. If the stock price in June is $150, will you exercise your call? O Yes Ο Νο a-2. What is the net profit/loss on your position? (Input the amount as a positive value.) Net profit of $ 139 a-3. What is the rate of return on your position? (Negative value should...
Refer to the stock options on Apple in the Figure 2.10. Suppose you buy a September...
Refer to the stock options on Apple in the Figure 2.10. Suppose
you buy a September expiration call option on 100 shares with
exercise price $100.
a-1. If the stock price in September is $102,
will you exercise your call?
Yes
No
a-2. What is the net profit/loss on your
position? (Negative value should be
indicated by a minus sign.)
(Click to select)Net Profit/ Net
Loss $
a-3. What is the rate of return on your
position? (Round your answer...
od 2 PS (Problem Sets) Refer to the stock options on Apple in the Egure 210....
od 2 PS (Problem Sets) Refer to the stock options on Apple in the Egure 210. Suppose you buy an May expiration call option on 100 shares with the excise price of $140. 6-1. If the stock price in May is $152, will you exercise your call?! Yes NO 6-2. What is the net profit loss on your position? (input the amount as a positive value.) 6-3. What is the rate of return on your position (Negative value should be...
Suppose you think Apple stock is going to appreciate substantially in value in the next year....
Suppose you think Apple stock is going to appreciate substantially in value in the next year. Say the stock's current price, So, is $50, and a call option expiring in one year has an exercise price, X, of $50 and is selling at a price, C, of $9. With $18,900 to invest, you are considering three alternatives. Clarification: Calculate the value of the options assuming that you exercise them when you calculate the portfolio value (i.e. six months from now)...
1. Apple stock is selling for $120 per share. Call options with a $117 exercise price...
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Suppose you think Apple stock is going to appreciate substantially in value in the next year....
Suppose you think Apple stock is going to appreciate substantially in value in the next year. Say the stock's current price, So, Is $125, taly in value in the next yearSay the stock is current price, Sof $125, and a call option expiring in one year has an exercise price, X, of $125 and is selling at a price, C, of $8. With $16,000 to Invest, you are considering three alternatives. a. Invest all $16,000 in the stock, buying 128...
Apple stock is selling for $128.92 per share. Call options with an $117.25 exercise price are...
Apple stock is selling for $128.92 per share. Call options with an $117.25 exercise price are priced at $12.17. What is the intrinsic value of the option, and what is the time value? The intrinsic value of the option is $(Round to the nearest cent.) The time value of the option is s (Round to the nearest cent.)
Suppose you think Apple stock is going to appreciate substantially in value in the next year....
Suppose you think Apple stock is going to appreciate substantially in value in the next year. Say the stock's current price, Se, is $40, and a call option expiring in one year has an exercise price, X, of $40 and is selling at a price, C, of $15. With $15,000 to invest, you are considering three alternatives. a. Invest all $15,000 in the stock, buying 375 shares. b. Invest all $15,000 in 1,000 options (10 contracts). c. Buy 100 options...
Suppose you think Apple stock is going to appreciate substantially in value in the next year....
Suppose you think Apple stock is going to appreciate substantially in value in the next year. Say the stock's current price, Se, is $50, and a call option expiring in one year has an exercise price, X, of $50 and is selling at a price, C, of $16. With $20,800 to invest, you are considering three alternatives. a. Invest all $20,800 in the stock, buying 416 shares. b. Invest all $20,800 in 1,300 options (13 contracts). c. Buy 100 options...
Assume the risk-free is zero and the market prices for Apple stock options that expire in...
Assume the risk-free is zero and the market prices for Apple stock options that expire in 1 year are as follows: Strike Price $350. $450 Call Premium $25. $75 Put Premium $15. $60 a) Specific the components and present cost of a long synthetic one-year forward agreement on Apple stock using only the options with strike price $350 in the table. The position should have a payoff at expiration that is identical to a 1-year forward agreement with a forward price...
Refer to the stock options on Apple in the Figure 2.10: Suppose you buy an June expiration call option on 20 shares with the excise price of $135. a-1. If the stock price in June is $150, will you exercise your call? O Yes Ο Νο a-2. What is the net profit/loss on your position? (Input the amount as a positive value.) Net profit of $ 139 a-3. What is the rate of return on your position? (Negative value should...
Refer to the stock options on Apple in the Figure 2.10. Suppose
you buy a September expiration call option on 100 shares with
exercise price $100.
a-1. If the stock price in September is $102,
will you exercise your call?
Yes
No
a-2. What is the net profit/loss on your
position? (Negative value should be
indicated by a minus sign.)
(Click to select)Net Profit/ Net
Loss $
a-3. What is the rate of return on your
position? (Round your answer...
od 2 PS (Problem Sets) Refer to the stock options on Apple in the Egure 210. Suppose you buy an May expiration call option on 100 shares with the excise price of $140. 6-1. If the stock price in May is $152, will you exercise your call?! Yes NO 6-2. What is the net profit loss on your position? (input the amount as a positive value.) 6-3. What is the rate of return on your position (Negative value should be...
Suppose you think Apple stock is going to appreciate substantially in value in the next year. Say the stock's current price, So, is $50, and a call option expiring in one year has an exercise price, X, of $50 and is selling at a price, C, of $9. With $18,900 to invest, you are considering three alternatives. Clarification: Calculate the value of the options assuming that you exercise them when you calculate the portfolio value (i.e. six months from now)...
Suppose you think Apple stock is going to appreciate substantially in value in the next year. Say the stock's current price, So, Is $125, taly in value in the next yearSay the stock is current price, Sof $125, and a call option expiring in one year has an exercise price, X, of $125 and is selling at a price, C, of $8. With $16,000 to Invest, you are considering three alternatives. a. Invest all $16,000 in the stock, buying 128...
Apple stock is selling for $128.92 per share. Call options with an $117.25 exercise price are priced at $12.17. What is the intrinsic value of the option, and what is the time value? The intrinsic value of the option is $(Round to the nearest cent.) The time value of the option is s (Round to the nearest cent.)
Suppose you think Apple stock is going to appreciate substantially in value in the next year. Say the stock's current price, Se, is $40, and a call option expiring in one year has an exercise price, X, of $40 and is selling at a price, C, of $15. With $15,000 to invest, you are considering three alternatives. a. Invest all $15,000 in the stock, buying 375 shares. b. Invest all $15,000 in 1,000 options (10 contracts). c. Buy 100 options...
Suppose you think Apple stock is going to appreciate substantially in value in the next year. Say the stock's current price, Se, is $50, and a call option expiring in one year has an exercise price, X, of $50 and is selling at a price, C, of $16. With $20,800 to invest, you are considering three alternatives. a. Invest all $20,800 in the stock, buying 416 shares. b. Invest all $20,800 in 1,300 options (13 contracts). c. Buy 100 options...
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