Assume you purchased the right to sell 2,000 shares of Target stock in March 2022 at a strike price of $230 per share. Suppose Target stock sells for $208 per share immediately before your options' expiration. What is the rate of return on your investment? Wh s your rate of return if the stock sells for $252 per share (think about it)? Assume your holding period for this investment is exactly three months. Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3-month returns a percent rounded to 2 decimal places. Return on investment at $208 %
Assume you purchased the right to sell 2,000 shares of Target stock in March 2022 at a strike price of $230 per share. Suppose Target stock sells for $208 per share immediately before your options' expiration. What is the rate of return on your investment? Wh s your rate of return if the stock sells for $252 per share (think about it)? Assume your holding period for this investment is exactly three months. Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3-month returns a percent rounded to 2 decimal places. Return on investment at $208 %
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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Question
Transcribed Image Text:DD Center Strike 12) Calls/Puts 80 Calls
Ticker
Bid
21-Jan-22 (0d); CSize 100; R.26; IFwd 216.06
5.80
1 TGT 1/21/22 C210
2) TGT 1/21/22 C212.5
3) TGT 1/21/22 (215
4 TGT 1/21/22 C217.5
5) TGT 1/21/22 C220
3.65
1.77
56
15
10 Puts
Calls
10.00
4.60
1.76
.62
Ask
7.40
6.10
2.28
.89
.26
19 Term Structure 1) Moneyness
21.60
13.80
8.65
5.15
2.95
Last
18-Feb-22 (28d); CSize 100; IDiv .78 USD; R .26; IFwd 215.32
TGT 2/18/22 C200
7) TGT 2/18/22 C210
17.55
20.00
10.25
4.90
TGT 2/18/22 C220
TGT 2/18/22 C230
100 TGT 2/18/22 C240
1.96
.73
18-Mar-22 (56d); CSize 100; IDiv .78 USD; R.26; IFwd 215.36
11) TGT 3/18/22 C200
20.15
12) TGT 3/18/22 C210
13.45
130 TGT 3/18/22 C220
8.35
14 TGT 3/18/22 C230
4.85
15) TGT 3/18/22 C240
2.70
7.35
6.65y
2.10
.80
21
28.50y
10.80
5.15
1.98
.72
29.00y
14.25
9.65
5.10
2.85
IVM
118.18
130.35
66.42
64.54
60.19
37.18
29.19
27.75
27.49
28.22
35.07
32.58
31.34
31.07
31.08
Volm
Strike
Puts
Ticker
Bid
21-Jan-22 (0d); CSize 100; R 26; IFwd 216.06
.18
44
89
1.96
3.90
Ask
.31
.59
5
4210.00 50 TGT 1/21/22 P210
212.50 52 TGT 1/21/22 P212.5
5215.00 530 TGT 1/21/22 P215
77217.50 50 TGT 1/21/22 P217.5
62 220.00 55) TGT 1/21/22 P220
5 18-Feb-22 (28d); CSize 100; IDiv .78 USD; R .26; IFwd 215.32
200.00 56 TGT 2/18/22 P200
10 210.00 57) TGT 2/18/22 P210
62 220.00 58 TGT 2/18/22 P220
79 230.00 59 TGT 2/18/22 P230
102 240.00 60 TGT 2/18/22 P240
5- 18-Mar-22 (56d); CSize 100; IDiv .78 USD; R.26; IFwd 215.36
200.00 61) TGT 3/18/22 P200
16 210.0062) TGT 3/18/22 P210
2.10
4.45
9.15
16.30
23.85
5.00
8.30
12.85
20 220.00 6300 TGT 3/18/22 P220
35 230.00 60 TGT 3/18/22 P230
16 240.00 65) TGT 3/18/22 P240
19.15
26.05
1.22
2.46
4.55
2.20
4.75
9.55
16.90
25.95
Last
5.15
8.50
13.45
19.80
27.80
.30
.50
1.00
2.30
4.00
2.10
4.60
9.40
16.37
23.78
4.95
8.35
12.55
18.49
25.83
IVM
87.48
77.91
63.96
60.30
56.40
32.04
29.45
27.52
27.01
16.79
34.16
32.35
31.34
30.06
28.44
Volm
58
36
202
86
149
44
462
34
28
20
18
38
6
9
5
Transcribed Image Text:Assume you purchased the right to sell 2,000 shares of Target stock in March 2022 at a strike price of $230 per share. Suppose
Target stock sells for $208 per share immediately before your options' expiration. What is the rate of return on your investment? What
is your rate of return if the stock sells for $252 per share (think about it)? Assume your holding period for this investment is exactly
three months.
Note: A negaive value should be indicated by a minus sign. Do not round intermediate calculations. Enter your 3-month returns as
a percent rounded to 2 decimal places.
Return on investment at $208
Return on investment at $252
%
%
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