31% D 4:28E) None of the above17. Given below the listing of StockOptions on AT&T. Suppose you buy aJune expiration two call option withan exercise price of $55. If the stockprice in July is $62.5, what is yourprofit/loss on your position? (Assumethe contract size is 100 shares). "AT&TCALLPUTExpiration Strike LastOpen lut.VolOpen Int.VolLastMay552.790.126.66.60.12-0.018366372.6June553.150.3421.2434.40.340.03295.21444.8July553.840.270.615.60.45-0.04266.64383.6May650.1020.4216284118440.24-0.246132.63849.6June650.354 -0.3181551328591.20.54-0.1023563.46712.8July651.242 -0.144538.223521.56-0.006172.81316.4A) Profit of $1,500B) Profit of $4.35 per contract.C) Profit of $870D) Options (B) & (C)O E) None of the above18. You are interested in buying a T-D'IL

Correct Answer is D) option (B) and (C)

17. Given below the listing of Stock Options on AT&T. Suppose you buy a June expiration two call option with an exercise price of $55. If the stock price in July is $62.5, what is your profit/loss on your position? (Assume the contract size is 100 shares). AT&T CALL PUT Expiration Strike Last Open lut. Open lat. Vol. Last Vol. 2.79 May June 55 0.12 6.6 6.6 0.12 -0.018 366 372.6 55 3.15 0.342 1.2 434.4 0.34 0.03 295.2 1444.8 July 55 3.84 027 0.6 15.6 0.45 -0.042 66.6 4383.6 May 65 0.102 0.42 16284 11844 0.24 -0.24 6132.6 3849.6 June 65 0.354 -0.318 15513 28591.2 0.54 -0.102 3563.4 6712.8 July 65 1.242 -0.144 538.2 2352 1.56 -0.006 172.8 1316.4 O A) Profit of $1,500 B) Profit of $435 per contract. C) Profit of $870 O D) Options (B) & (C) E) None of the above

17. Given below the listing of Stock Options on AT&T. Suppose you buy a June expiration two call option with an exercise price of $55. If the stock price in July is $62.5, what is your profit/loss on your position? (Assume the contract size is 100 shares). AT&T CALL PUT Expiration Strike Last Open lut. Open lat. Vol. Last Vol. 2.79 May June 55 0.12 6.6 6.6 0.12 -0.018 366 372.6 55 3.15 0.342 1.2 434.4 0.34 0.03 295.2 1444.8 July 55 3.84 027 0.6 15.6 0.45 -0.042 66.6 4383.6 May 65 0.102 0.42 16284 11844 0.24 -0.24 6132.6 3849.6 June 65 0.354 -0.318 15513 28591.2 0.54 -0.102 3563.4 6712.8 July 65 1.242 -0.144 538.2 2352 1.56 -0.006 172.8 1316.4 O A) Profit of $1,500 B) Profit of $435 per contract. C) Profit of $870 O D) Options (B) & (C) E) None of the above

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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1. If you had bought the January put with exercise price $105, will you exercise your put? 2. What is the profit (loss) on your position?
Intro A non dividend-paying stock currently trades at $80. You short sell one share of stock, buy a call option and write a put option, both with a strike price of $51. Your immediate cash inflow is $47.84. Both options expire in one year. Part 1 What is the risk-free rate? 3+ decimals
19. You buy a January put option now with a strike price of 350. If the stock price in January is $330, how much is your net profit or loss? * 0/4 Captionless Image A) Loss of $5.35 B) Gain of $20 C) Loss of $20 D) Loss of $25.35 E) None of the ab
15
Question 44. You hold a call option on Pear Corp.'s common stock. The call option has a strike price of $81 per share (a total strike price of $8,100), with a maturity date 1 year into the future. The option is exercisable at any time on or before the maturity date, Which of the following is true if you exercise the option when Pear Corp.'s common stock is trading at $90 per share? (A) The market price is $9,000, you lose $900, and the option is out-of-the-money. (B) The market price is $9,000, you make $900, and the option is out-of-the-money. (C) The market price is $9,000, you lose $900, and the option is in-the-money. (D) The market price is $9,000, you make $900, and the option is in-the-money. (E) None of the above.
1. Three months ago an investment company bought for £8 a call option on a stock with an exercise price of £136. If the stock price at expiration of this option is £147. Select which of the following best describes the option value, the decision of the Investment Company and the return on investment thereon. A. Option value Decision Profit / (loss) % Exercise price – Stock price Exercise 37.5% B. Option value Decision Profit / (loss) % Stock price – Exercise price Don’t Exercise 2.2% C. Option value Decision Profit / (loss) % Exercise price – Stock price Exercise 2.2% D. Option value…
Consider a particular stock with call and put options. The date is January 12, and the price of the stock is P185. The table below shows the closing prices of four options, two of which expire in February and May and have exercise prices of 175 and 205, respectively. The February options will expire on February 16th, while the May options will expire on October 20th. These specific selections are of the American style.
The following table lists prices of Amazon options in January 2018 when Amazon stock was selling for $1,200. Exercise Price Expiration Date April 2018 Call Price Put Price $ 31.10 $1,200 1,300 1,400 $1,200 1,300 1,400 $1,200 1,300 1,400 $132.70 73.20 70.10 134.20 $ 53.55 96.00 33.00 July 2018 $161.70 104.00 62.55 156.05 January 2019 $210.00 $ 88.05 155.35 133.25 112.00 190.00 Suppose that by January 2019, the price of Amazon could either rise from its January 2018 level to $1,200 × 1.25 = $1,500.00 or fall to $1,200/1.25 = $960.00. a. What would be your percentage return on a January expiration call option with an exercise price of $1,200 if the stock price rose? (Round your answer to 2 decimal places.) b. What would be your percentage return if the stock price fell? (Negative value should be indicated by a minus sign.) c. Which is riskier: the stock or the option? a. Percentage return b. Percentage return Which is riskier: the stock or the option? % (100) % Option C.
The following table lists the options on Amazon shares in January 2018 when Amazon stock was selling for $1,210. Exercise Price $1,210 1,310 1,410 Expiration Date July 2018 Call Price $161.90 104.10 62.65 a. Call option with exercise price of $1,210 b. Put option with exercise price of $1,210 C. Call option with exercise price of $1,310 d. Put option with exercise price of $1,310 e. Call option with exercise price of $1,410 f. Put option with exercise price of $1,410 Use the data in the table to calculate the payoff and the profits for investments in each of the following July maturity options, assuming that the stock price on the expiration date is $1,305. (Negative amounts should be indicated by a minus sign. Round your "Profit" answers to 2 decimal places.) Put Price $53.56 96.10 156.15 Payoff Profit
8
Awesome Company's stock is currently trading at 50 per share and the risk free rate is currently 6% per year. The price of a put option on Awesome stock with a strike price of 30 and 6 months to maturity is currently 1. Determine the price of a call option with the same strike price and maturity as the put option. No dividends will be paid during the remaining lifetime of the option. A. 20.96 B. 21.86 C. 22.70 D. 51.00
Q7: TFS stock is eurrently trading at $17.25 per share. In 4 months it will either rise by 24.00% or fall by 20.00% with equal probability. A 4 month put option struck at $22.43 is trading at $2.59. The risk free rate is 5.50%. What is the expected profit or loss (at maturity) of the put option? A) $2.41 B) $1.32 C) $2.63 D) $1.87 E) $2.19

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