Current stock price for Amazon is $810. A call option on Amazon stock with the exercise price of $810 and maturity of 1 month sells at $5 premium. Ignore interests. (1) Plot the payoff against Amazon's stock price if you buy only Amazon stock • What is your max gain? What is your max loss? (2) Plot the payoff against Amazon's stock price if you sell only call option on Amazon stock • What is your max gain? What is your max loss? (3) Plot the payoff against Amazon's stock price if you buy Amazon stock and sell call option on Amazon stock What is your max gain? What is your max loss?
Current stock price for Amazon is $810. A call option on Amazon stock with the exercise price of $810 and maturity of 1 month sells at $5 premium. Ignore interests. (1) Plot the payoff against Amazon's stock price if you buy only Amazon stock • What is your max gain? What is your max loss? (2) Plot the payoff against Amazon's stock price if you sell only call option on Amazon stock • What is your max gain? What is your max loss? (3) Plot the payoff against Amazon's stock price if you buy Amazon stock and sell call option on Amazon stock What is your max gain? What is your max loss?
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
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Transcribed Image Text:Current stock price for Amazon is $810. A call option on Amazon
stock with the exercise price of $810 and maturity of 1 month
sells at $5 premium. Ignore interests.
(1) Plot the payoff against Amazon's stock price if you buy only Amazon
stock
• What is your max gain? What is your max loss?
(2) Plot the payoff against Amazon's stock price if you sell only call option
on Amazon stock
• What is your max gain? What is your max loss?
(3) Plot the payoff against Amazon's stock price if you buy Amazon stock
and sell call option on Amazon stock
What is your max gain? What is your max loss?
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